Goldman Sachs 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.
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%.
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