Goldman Sachs GroupConsider lowering the US economic growth forecast for the second half of the year.
A few days ago, economists warned that the US economy was fluctuating sharply. In addition, the University of Michigan's consumer confidence index has plummeted, and the sharp decline in the economic index over the past half-century has been linked to sudden negative changes in the economy. Tuesday's dismal retail sales figures became the last straw to crush optimists.
Bank of America CorporationA survey of fund managers shows that overall market confidence has collapsed as expectations for economic growth have fallen.
Goldman Sachs Group strategist Chris Hussey's latest assessment of the current situation is rather pessimistic. He explained:
Us retail sales fell 1.1 per cent in July, a bigger-than-expected decline. It is worth noting that any epidemic blockade measures have been implemented during this period, indicating that American consumers prefer to stay at home to reduce spending.
In addition, according to individual categories of surveys, non-essential consumer goods (such as electronics and electrical appliances) and non-physical retail stores have seen the biggest slowdown, which may reflect that some unemployment benefits schemes are about to expire.
On the supply side, the increase in industrial production in July was mainly driven by an 11.2 per cent increase in the car and parts manufacturing sector, while corporate inventories also increased. However, affected by the current sales situation and sales prospects, builders' confidence has declined to the lowest level since July 2020. "
Chris Hussey wrote:
"all in all, although we still expect that the Delta variant in the United States will not have a significant impact on the economy when the vaccine supply is adequate and the epidemic prevention and control policy is relatively loose, given the lower-than-expected retail sales and car production in July, coupled with the fact that the Delta variant is increasingly likely to be a drag on service consumptionWe may revise our forecast for economic growth in the second half of the year.。”
It is true that the situation is not optimistic, but Bank of America Corporation's story is even worse.
Michelle Meyer, chief economist of Bank of America Corporation, stressed that while she expects a small increase in US retail sales in August, there are still downside risks. She said:
Spending by non-store retailers should rebound, but spending on services will be cut. According to the summary of BAC credit and debit card data, travel spending has dropped significantly, which seems to be in line with the increase in COVID-19 cases. "
"nominal spending is weak after the price hike (the quarterly index of personal consumption expenditure deflates prices on an annualised basis), with real consumer spending tracking only 1.5 per cent quarter-on-quarter growth in the third quarter and 12.3 per cent in the second quarter," Meyer wrote.
Substituting this number into the GDP model, Bank of America Corporation found thatEconomic growth slowed down in the third quarterAnd it is now only 4.5 per cent after the retail sales report was released, and the bank's official forecast for GDP growth in the third quarter was 7 per cent month-on-quarter. This gap is not to be underestimated.
Bank of America Corporation believes that the Biden government had better find a way to pass the 350 million budget plan, otherwise American consumers will have bad luck.