Goldman Sachs cuts US economic growth forecast amid Delta variant surge: media
WASHINGTON - US investment bank Goldman Sachs on Monday revised down its forecast for US economic growth this year as American consumers are likely to spend less amid a Delta variant-fueled COVID-19 surge, according to Bloomberg News.
Goldman Sachs economist Ronnie Walker wrote in a report to clients on Monday that overall US economic expansion in 2021 is now seen at 5.7 percent, lower than 6 percent estimated at the end of August, Bloomberg reported.
"The hurdle for strong consumption growth going forward appears much higher: the Delta variant is already weighing on Q3 growth, and fading fiscal stimulus and a slower service-sector recovery will both be headwinds in the medium term," Walker was quoted as saying, pointing to a "harder path" ahead for American consumers than previously anticipated.
The bank also lifted its projection for the US unemployment rate to 4.2 percent at end of 2021 from a prior estimate of 4.1 percent, according to Bloomberg.
The revised forecast came after the US Labor Department reported last week that US employers added fewer-than-expected 235,000 jobs in August, with unemployment rate dropping to 5.2 percent, indicating a marked slowdown in job growth amid a Delta variant-fueled COVID-19 surge.
US daily COVID-19 infections have risen 316 percent since Labor Day 2020 and hospitalizations are also up by 158 percent compared to the Labor Day weekend a year ago, USA Today reported on Monday.
The massive number of hospitalizations is causing numerous states across the nation to run short on the number of ICU beds available to patients, the report said.