Goldman Sachs economists cut Q3 growth forecast for U.S.

Goldman Sachs economists cut Q3 growth forecast for U.S.

Goldman Sachs economists cut Q3 growth forecast for U.S.
© Reuters. FILE PHOTO: The Goldman Sachs company logo is on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 13, 2021. REUTERS/Brendan McDermid

WASHINGTON (Reuters) - Goldman Sachs (NYSE:GS) economists lowered their tracking estimate of U.S. economic growth in the third quarter to 5.5% from 9% due to the impact of the Delta variant but raised their forecast for the fourth quarter and beyond.

In a note on Wednesday, the investment bank said the Delta variant was having a "somewhat" larger-than-expected effect on growth and inflation due to its hit to consumer spending and production.

"Spending on dining, travel, and some other services is likely to decline in August, though we expect the drop to be modest and brief," the economists wrote, adding that supply chain disruptions are also proving to be more prolonged.

They raised their fourth-quarter estimate to 6.5% from 5.5%, on the prediction that virus fears will diminish, the services sector recovery resumes and inventories are replenished.

The economists also raised their forecast for the first three quarters of 2022.