Goldman Sachs cuts its growth forecast for the US economy for the third time. We will follow

Goldman Sachs, after the negative signals of the last few weeks, in a note entitled “A Harder Path Ahead “, cut its forecasts on third quarter GDP for the third time in the last month. So even this investment bank is realizing that the economy is about to crash into a wall and has reached this conclusion through the following steps:

• On August 18, Goldman cuts its GDP forecast for the third quarter from 8.5% to 5.5%, while expecting a "bigger rise in inflation," a sweetened way to talk about Stagflation. very bad thing in Economics;
• On Thursday, Sept. 2, Goldman cut its third-quarter GDP estimate from 5.5% to 3.5% for the second time, "to reflect the slower pace of manufacturing and commercial inventory growth in July."
• after just 4 days later, on September 6, under the cover of the Memorial Day holiday, Goldman just cut its third quarter GDP forecast for the third time, keeping its third quarter GDP forecast at 3.5% , but cutting its mid-term forecast, starting with the fourth quarter GDP which it now sees at 5.5%, down from 6.5%, which means that on an annual average basis, the GDP growth forecast of the bank is now 5.7% (against 6.2% previously) in 2021 and 4.6% (against 4.3% previously) in 2022, with a sharp deceleration.

In addition, the bank reads the negative effects of the end of fiscal stimuli, with 7 million Americans who, from tomorrow, will no longer have extraordinary contributions to unemployment. The end of the stimulus will certainly have an effect on medium-term growth:

Another little considered element is that consumer spending will change again, returning from goods to services, with another turn, opposite to that which occurred during the pandemic.

Eventually even Goldman Sachs fails to make completely accurate long-term predictions and has to adapt to reading the times and seeing what happens. Nothing wrong with that, if it weren't for a merchant bank that pays fine economists.

However, this will also have consequences for us: the part of growth driven by US exports will weaken, all in correspondence with the end of national stimuli. Those who expect a sparkling 2022 risk being badly disappointed.

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The Goldman Sachs article cuts its growth forecast for the US economy for the third time. We will follow comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/goldman-sachs-taglia-per-la-terza-volta-le-sue-previsioni-di-crescita-per-leconomia-usa-noi-seguiremo/ on Tue, 07 Sep 2021 09:00:05 +0000.