Goldman Sachs economists cut Q3 growth forecast for U.S.

1 minute read

The Goldman Sachs company logo is on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 13, 2021. REUTERS/Brendan McDermid/File Photo

Register now for FREE unlimited access to

WASHINGTON, Aug 19 (Reuters) - Goldman Sachs economists lowered their tracking estimate of U.S. economic growth in the third quarter to 5.5% from 9% due to the impact of the Delta variant but raised their forecast for the fourth quarter and beyond.

In a note on Wednesday, the investment bank said the Delta variant was having a "somewhat" larger-than-expected effect on growth and inflation due to its hit to consumer spending and production.

"Spending on dining, travel, and some other services is likely to decline in August, though we expect the drop to be modest and brief," the economists wrote, adding that supply chain disruptions are also proving to be more prolonged.

They raised their fourth-quarter estimate to 6.5% from 5.5%, on the prediction that virus fears will diminish, the services sector recovery resumes and inventories are replenished.

The economists also raised their forecast for the first three quarters of 2022.

Register now for FREE unlimited access to
Reporting by Lindsay Dunsmuir; Editing by Anil D'Silva

Our Standards: The Thomson Reuters Trust Principles.