Consumer spending recovery slows down! Goldman Sachs lowered its US economic growth forecast for the third time in two months.

Goldman Sachs (Goldman Sachs) cut its US growth forecast for this year and next again on Sunday, citing a decline in fiscal support by the end of next year and a slower recovery in consumer spending than previously expected. This is the third time in two months that the investment bank has cut its growth forecast.

According to a research report released on Sunday by a team of economists at Goldman Sachs, led by Jan Hatzius, the bank cut its US GDP growth forecast for 2021 to 5.6 per cent from 5.7 per cent and its 2022 growth forecast to 4 per cent from 4.4 per cent.

"after updating our estimates of the key growth drivers driving our consumption forecasts-reopening, fiscal stimulus, pent-up savings and wealth effects-and taking into account the long-term drag on consumer services spending by the epidemic, we now expect a slower recovery in consumer spending," economists said.

They noted that "the epidemic has caused a more lasting drag on epidemic-sensitive consumer services" and that semiconductor supplies are not expected to improve until the first half of 2022, delaying inventory replenishment until next year. This means that the recovery from now on will not be as fast as previously expected.

In addition to the recent drag on the virus, they expect spending on some services and non-durable goods to remain below pre-epidemic trends, especially "if switching to telecommuting leads to a reduction in overall spending for some workers".

Economists point out that the two major challenges to US economic growth in the medium term are the slowdown in fiscal support and the need for a rapid rebound in spending on services to offset the slowdown in commodity purchases.

On a quarterly basis, Goldman Sachs cut its US GDP growth forecast for the fourth quarter of 2021 and the first quarter of 2022 from 5 per cent to 4.5 per cent, from 4.5 per cent to 4 per cent in the second quarter of 2022, and from 3.5 per cent to 3 per cent in the third quarter of next year.

However, the bank raised its growth forecast for the fourth quarter of 2022 to 1.75 per cent from 1.5 per cent.

As recently as the beginning of the year, Goldman Sachs expected the u.s. economy to grow by 6.6% this year. But since August, the bank has been downgrading its growth forecasts, citing the rapid spread of the Delta variant, weakening financial support and slowing consumption. On Aug. 18, Goldman Sachs lowered its forecast for full-year US economic growth in 2021 to 6% from 6.4%. In a report released on Sept. 6, Goldman Sachs further lowered the overall rate of expansion of the u.s. economy to 5.7% in 2021.