US: 2021 GDP forecasts revised lower to 5.7% – Goldman Sachs

Analysts at Goldman Sachs have revised down the US GDP forecasts for 2021 while upgrading it for the next year.

Key takeaways

“Expect GDP growth of 3.5% in Q3.

5.5% in Q4 (previously 6.5%).

3.7% in 2022 Q4/Q4 (previously 3.0%).”

“On an annual average basis, our GDP growth forecast is now 

5.7% (vs. 6.2% consensus) in 2021.

4.6% (vs. 4.3% consensus) in 2022.”

“The annual average masks a sharp deceleration to below trend by end-2022, citing slower consumption growth with Covid fears likely to persist through the winter virus season, it might take a while for spending to recover in still-depressed categories such as very high-contact and office-adjacent services.”

“The need for inventory restocking has grown larger as supply chain disruptions have hit production again in Q3.”

“There are now signs that the Delta wave is cresting...We therefore expect a job market rebound in coming months and have also offset part of the Q3/Q4 GDP downgrade with stronger numbers in the first half of 2022.”