Construction worker climbs above line of fencing on site of large public infrastructure reconstruction project in New York.
Goldman Sachs cut its U.S. economic growth target to 5.6% for 2021 and 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% global GDP growth in 2021 and 4.4% in 2022, according to research released on Saturday by authors including its chief economist Jan Hatzius.
They pointed to a longer lasting virus drag on virus-sensitive consumer services as well as an expectation that semiconductor supply will not improve until the first half of 2022, delaying inventory restocking until next year.
Also, they expect spending on some services and/or non-durable goods to stay persistently below pre-pandemic trends if the shift to remote work results in some workers spending less overall. On a quarterly basis, Goldman cut both its first quarter 2021 and fourth quarter 2022 GDP estimates to 3.5% 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%.
The polling authority increased its forecast for the fourth quarter 2022 to 1.85% from 1.5%.