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Goldman cuts forecast for U.S. economic growth in 2021 and 2022

Economic IndicatorsOct 10, 2021 04:05PM ET
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© Reuters. FILE PHOTO: A construction worker climbs above a line of fencing at the site of a large public infrastructure reconstruction project of an elevated roadway and bridges in upper Manhattan in New York City, New York, U.S., April 22, 2021. REUTERS/Mike Segar

(Reuters) - Goldman Sachs (NYSE:GS) cut its U.S. economic growth target to 5.6% for 2021 and to 4% for 2022 citing an expected decline in fiscal support through the end of next year and a more delayed recovery in consumer spending than previously expected.

The firm previously expected 5.7% gross domestic product (GDP) growth in 2021 and 4.4% growth in 2022, according to research released on Sunday from authors including its chief economist Jan Hatzius.

They pointed to a "longer lasting virus drag on virus-sensitive consumer services" as well as an expectation that semiconductor supply likely will not improve until the first half of 2022, delaying inventory restocking until next year.

And on top of the near-term virus drag, they also expect spending on some services and non-durable goods to stay persistently below pre-pandemic trends especially "if a shift to remote work results in some workers spending less overall."

On a quarterly basis Goldman cut both its fourth-quarter 2021 and first-quarter 2022 GDP estimates to 4.5% from 5% and shaved its second quarter 2022 estimate to 4% from 4.5% while reducing its third quarter estimate to 3% from 3.5%.

However, it increased its fourth-quarter 2022 estimate to 1.75% from 1.5%.

Goldman cuts forecast for U.S. economic growth in 2021 and 2022
 

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Comments (16)
Vi Ma
Vi Ma Oct 11, 2021 12:06AM ET
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They overestimate everything, especially on the optimistic part.
perplexed76 .
perplexed76 . Oct 10, 2021 11:35PM ET
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at the same time they see oil at 100. They know themselves.
Lake Lot
Lake Lot Oct 10, 2021 9:53PM ET
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Make america great Again
Ac Tektrader
Ac Tektrader Oct 10, 2021 9:53PM ET
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make America great again, stop electing conservative Republicans.
king michael
king michael Oct 10, 2021 8:46PM ET
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$ printing is going nowhere as no country is buying government debt but slowly dumping. There is no way this economy can avoid a bad recession coming soon. When losing the COVID free money, millions working American will have to join the millions already in poverty and homeless. Those millions just making less than $15/H also can not afford for a minimum living need as inflation keep skyrocketing.
James Pattison
James Pattison Oct 10, 2021 8:22PM ET
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Real inflation is 15%
peter neal
peter neal Oct 10, 2021 6:25PM ET
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Inflation is 8 Percent and rising. Something is going to give soon. This transitory narrative is 🐂.
Jeff Caldwell
Jeff Caldwell Oct 10, 2021 6:25PM ET
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guess this means we're in a recession ya?
Juniper Ls
Juniper Ls Oct 10, 2021 6:15PM ET
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Lowered estimates for growth are not new news.
New Jazenevd
New Jazenevd Oct 10, 2021 6:03PM ET
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This is not the last cut. Goldman is still too optimistic, perhaps artificially optimistic, about pace and state of US economy. Quite possible, financial houses use two-tier estimate process: one internal for own investment decisions and another external for brainwashed public.
Empire Destroyer
Empire Destroyer Oct 10, 2021 5:41PM ET
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Basically Goldman is telling you guys, we want you to panic sell this year and drop the stock prices so we can buy in, pump it and make you fomo so you retailers can take it to the moon for us 🤣
Bob Mcadoo
Bob Mcadoo Oct 10, 2021 5:40PM ET
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Whens the next cut? Next month? Keep cutting
Mike Mike
Mike Mike Oct 10, 2021 5:27PM ET
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Jobless incompetents are the virus
ZS Beck
ZS Beck Oct 10, 2021 4:46PM ET
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The way I see it, if spend 2$ to get 1$ economic growth, that's negative growth.If we have economic growth, why is our debt still going up? 28T and counting.Do I see it wrong?
Karl Kessler
Karl Kessler Oct 10, 2021 4:46PM ET
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Our debt is going up because taxes are too low and/or government spending is too high.
ZS Beck
ZS Beck Oct 10, 2021 4:46PM ET
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That's another problem.
Raymond Pasillas
Raymond Pasillas Oct 10, 2021 4:42PM ET
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Ban socialism
John Healy
John Healy Oct 10, 2021 4:42PM ET
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Restore true capitalism.
Ramjendra Dixit
Ramjendra Dixit Oct 10, 2021 4:36PM ET
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how will USD behave in common in days aginst JPY any suggetion
my name
my name Oct 10, 2021 4:35PM ET
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STAGFLATION: commodities +100%, GDP +5%
Millennial Metals
Millennial Metals Oct 10, 2021 4:25PM ET
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The USA hasn’t seen economic growth since the 1990s
Benoit Avril
Benoit Avril Oct 10, 2021 4:25PM ET
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Really?
 
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