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Goldman Sachs cuts U.S. GDP growth forecast for 2022 over Omicron fears

Economic IndicatorsDec 04, 2021 06:52PM ET
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2/2 © Reuters. FILE PHOTO: The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly 2/2

(Reuters) - Goldman Sachs (NYSE:GS) on Saturday cut its outlook for U.S. economic growth to 3.8% for 2022, citing risks and uncertainty around the emergence of the Omicron variant of the coronavirus.

Goldman economist Joseph Briggs said in a note that the Omicron variant could slow economic reopening, but the firm expects "only a modest drag" on service spending.

The firm now sees 2022 gross domestic product (GDP) growth of 3.8%, down from 4.2% previously on a full year basis, and Q4/Q4 growth of 2.9%, down from 3.3% before, Briggs said.

"While many questions remain unanswered, we now think a moderate downside scenario where the virus spreads more quickly but immunity against severe disease is only slightly weakened is most likely," he said.

Worker shortages could last longer if people do not feel comfortable returning to work due to the variant, according to the note.

Goldman pointed the spread of the virus could worsen supply shortages should other countries implement tighter restrictions, but increase in vaccination rates among foreign trade partners would prevent severe disruptions.

Goldman Sachs' U.S. forecast comes after the International Monetary Fund Managing Director Kristalina Georgieva said on Friday that the lender was likely to lower its global economic growth estimates due to the new Omicron variant of the coronavirus.

Goldman Sachs cuts U.S. GDP growth forecast for 2022 over Omicron fears
 

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Comments (12)
Franco Dominguez
Franco Dominguez Dec 04, 2021 10:07PM ET
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americans need to sacrifice to santa claus!!!
Todd Gray
Todd Gray Dec 04, 2021 8:36PM ET
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With the new M2. where we are is back at Q4 2019. But, under Biden, we have lost 100% energy independence, control of our supply chain, our labor supply, and Russian & Chinese respect. But, we have gained deferred payment with interest for stimulus money. 3 B's, and more vaccination pump. And, a loooong overdue infrastructure bill. Most 3rd world countries has faster internet than most of America.
Franco Dominguez
Franco Dominguez Dec 04, 2021 8:36PM ET
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i hv 6G since 1999
Stan Smith
Stan Smith Dec 04, 2021 8:17PM ET
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So Omicron is the lame excuse to halt tapering and keep interest rates the same
Todd Gray
Todd Gray Dec 04, 2021 8:17PM ET
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I don't know the last 18 months of death rates for all the underlying causes that did not die of covid. But, I do know we have not had one single day of covid deaths that have exceeded the precovid daily average for all underlying causes during the 4 years preceding covid-19.
Stan Smith
Stan Smith Dec 04, 2021 8:16PM ET
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Economic Growth was always going down anyway, Omicron is just the scapegoat!
John Laurens
John Laurens Dec 04, 2021 8:07PM ET
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Sackless..
John Laurens
John Laurens Dec 04, 2021 7:17PM ET
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hmmm
Al Ose
Al Ose Dec 04, 2021 7:07PM ET
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Time to buy
New Jazenevd
New Jazenevd Dec 04, 2021 12:26PM ET
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3.8 is way too high. Biden will keep it lower, somewhere around 2 and with fake statistics. Businesses do not expand in hostile environment.
Lurking Lurker
Lurking Lurker Dec 04, 2021 12:26PM ET
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good businesses will adapt.
Alex Fetanat
Alex Fetanat Dec 04, 2021 12:22PM ET
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Does this mean stock market will crash again on Monday?
Levan Jackson
Levan Jackson Dec 04, 2021 12:01PM ET
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nobody I know is particularly worried about the variant. And these are all people who were very worried about delta. Don't know if that really says anything but worth mentioning
Alex Fetanat
Alex Fetanat Dec 04, 2021 12:01PM ET
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Does that mean stock market will crash again on Monday?
Luis Bustamante
Luis Bustamante Dec 04, 2021 11:48AM ET
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Omicrom is a desperate attemp to bring inflation down and avoid  interest rate increases
Loudermilktits Loudermilktits
Loudermilktits Dec 04, 2021 11:48AM ET
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So wait, you think threat of Omi and repercussions such as lock downs that would bottle up supply chains even more, would bring inflation down? Lol do people even hear themselves anymore?
John Lakran
John Lakran Dec 04, 2021 11:48AM ET
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Well if the fear causes people to not buy as much stuff then sure it could help inflation as long as our lovely liberals in charge don't hand out trillions more the major driver of free cash to spend and inflation Luis isn't as wrong as you think.
Nordin Mohamad
Nordin Mohamad Dec 04, 2021 11:48AM ET
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fake news to justify more money hand out and extend qe....
Luis Bustamante
Luis Bustamante Dec 04, 2021 11:46AM ET
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Omicrom is a desperate attemp to bring inflation down and continue exansion programs.
 
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