Goldman Sachs GroupGroup economists downgraded their forecasts for US economic growth this year because the novel coronavirus Delta variant had a better-than-expected impact, heralding further disruptions in the supply chain and rising inflation.
The bank now expects US GDP to grow by 6 per cent in 2021, down from a previous forecast of 6.4 per cent. But Goldman Sachs Group raised his US GDP growth forecast for 2022 slightly to 4.5 per cent from 4.4 per cent.
Goldman Sachs Group, led by David Mericle, wrote in a report to clients on Wednesday: "Delta variant virus affects economic growth andThe impact of inflation is greater than we expected, and Delta variants and other disruptions could further push up the price of tight durable goods before the end of the year. "
Spending on catering, travel and other services in the US is likely to weaken in August as restaurant bookings, air travel and hospital elective surgery show signs of slowing, the Goldman Sachs Group team wrote.
Goldman Sachs Group expects US consumer spending to fall 1 per cent in August, while a report earlier this week showed that retail sales fell more than expected in July.
Goldman Sachs Group economists believe that supply chain obstacles will haunt enterprises for a period of time, forcing them to raise prices. They raised their core personal consumption expenditure inflation forecast for the end of 2021 to 3.75%.