Goldman Sachs Cuts US Forecasts for 2021 and 2022 on Consumer

Goldman Sachs cut its U.S. economic growth target to 5.6% for 2021 and to 4% for 2022 referring to an anticipated decrease in fiscal support through the end of next year and a more delayed recovery in consumer spending than previously expected.

The firm expected 5.7% gross domestic product (GDP) growth in 2021 and 4.4% growth in 2022. They referred to a longer-lasting virus drag on virus-sensitive consumer services as well as a goal that semiconductor supply likely will not grow until the first half of 2022. This delays inventory restocking until next year.

Goldman Sachs also expects spending on some services and non-durable goods to stay persistently below pre-pandemic trends particularly if there is a shift to remote work results in some workers spending less overall. On a quarterly basis Goldman Sachs cut both its fourth-quarter 2021 and first-quarter 2022 GDP estimates to 4.5% 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%.

However, it increased its fourth-quarter 2022 estimate to 1.75% from 1.5%. Investors have been pouring money into India’s stock market, and it could grow to more than $5 trillion to become the fifth largest in the world within three years. Indian start-ups have raised $10 billion through IPOs so far this year, more money than was raised in the last three years, the investment bank said in a report dated Sept. 19.