Original title: Wall Street is becoming more pessimistic! Goldman Sachs GroupAfter downgrading the US GDP in the third quarter, Bank of America CorporationIt is also closely followed by the data "speaking with facts."
Source: FX168
As the Delta variant continues to spread, the number of confirmed cases in the United States is rising rapidly, overshadowing optimistic expectations of economic recovery. Goldman Sachs Group downgraded the US GDP twice in three weeks, followed by the US banking sector, and the latest data also confirmed that high growth is likely to be weak.
Earlier this month, Goldman Sachs Group (Goldman Sachs) cut his US third-quarter GDP forecast to 5.5 per cent from 9.0 per cent, as delta slowed the economic recovery.
Now Bank of America Corporation (Bank of America) is doing the same thing.
Bank of America Corporation lowered his GDP forecast for the third quarter to 4.5% from 7.0%, "in response to the recent weakness in consumer spending against the backdrop of the rising number of COVID-19 infections. However, we expect growth to accelerate again to 6 per cent in the fourth and first quarters of next year as supply disruptions ease. "
Economists at the Goldman Sachs Group Group also lowered their forecast for US economic growth this year from 6.4 per cent to 6 per cent, on the grounds that the impact of the Delta virus was more severe than expected and could perpetuate supply chain disruptions and stubbornly high inflation.
The Goldman team predicts that spending on dining out, travel and some services is likely to decline, with current data showing a slowdown in restaurant bookings, air travel and other activities. Goldman Sachs Group predicts that consumer spending will fall by 1% in August, and supply chain bottlenecks will interfere with companies for some time and force operators to raise prices.
Ian Shepherdson, chief economist of Pantheon Macroeconomics, also cut his GDP growth forecast for the third quarter of this year to 7 per cent from 10 per cent, citing a more cautious view of consumer spending.
There is no doubt that the Fed is seeing the same trend as these Wall Street firms and will slow the pace of recovery, which should ease inflationary pressures and a slowdown in job growth.
The difference is that the increase is only postponed to the fourth quarter and beyond, but some at the Fed want to see it before they believe it, especially given the risks of other COVID-19 outbreaks.
The latest figures also support an increasingly popular view that the US economy is weak after two consecutive quarters of high growth of more than 6 per cent.
IHS Markit, a financial data provider, released US manufacturing and service PMI data for August, as the pace of expansion slowed to its slowest pace in eight months.
Us composite PMI fell to 55.4 in August, Markit manufacturing PMI initial value of 61.2, expected 62.5, interrupting the continuous upward trend.
IHS Markit said raw materials and labour shortages constrained output and pushed up inflation, with new order growth hitting its lowest level since 2021 and job growth at its slowest pace in more than a year.
Chris Williamson, chief economist of IHS Markit, commented: "not only is there a record delay in the supply chain, but the August survey showed that the hiring situation worsened, with job growth at its lowest level since July 2020, due to job-hopping or companies' inability to find suitable employees."