Goldman Sachs economists have cut their economic growth forecasts for 2021 and 2022 because of lagging consumer spending.
The economists in a Sunday note to clients blamed the downgrade on "a longer-lasting virus drag on virus-sensitive consumer services spending," a decreased financial stimulus, and a shortage in semiconductors, MarketWatch reported.
The forecast predicts economic growth of 5.6 percent in 2021, down from 5.7 percent, and 4 percent growth in 2022, down from 4.4 percent. The economists have upgraded their 2023 and 2024 forecasts, however, which they say offset the downturn.
The researchers said consumer spending is unlikely to reach pre-pandemic levels by next year.
The Goldman forecast is only the latest piece of troubling economic news for the Biden administration, which already faces an inflation spike, the highest gas prices in six years, and the worst unemployment numbers in a year.