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Goldman Sachs trims U.S. growth forecasts on slower service sector recovery

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People gather at the White Horse Tavern (est. 1880) as restrictions eased on indoor drinking in bars, allowing seating at the bar, during the outbreak of the coronavirus disease (COVID-19) in Manhattan, New York City, New York, U.S., May 3, 2021. REUTERS/Andrew Kelly/File Photo

LONDON, July 26 (Reuters) - Goldman Sachs trimmed its U.S. economic growth forecast for remainder of the year on Monday, citing a slower recovery in the services sector.

The Wall Street bank revised both Q3 and Q4 growth 1 percentage point lower, to 8.5% and 5.0% respectively. That left the 2021 growth forecast at 6.6% on a full-year basis.

"We have long expected growth to peak in a mid-year boom fueled by vaccination and fiscal support," Jan Hatzius said on a note to clients. "But the subsequent deceleration now looks likely to be a bit sharper because the goods-to-services rotation is likely to be less seamless."

Reporting by Karin Strohecker; Editing by Dhara Ranasinghe

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