New York City lender Goldman slashes US 2022 growth forecasts over Omicron jitters

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New York City lender Goldman slashes US 2022 growth forecasts over Omicron jitters

On Saturday, Goldman Sachs, the New York City-headquartered 11th-largest US lender and investment banking services provider, widely crowned as one of the Wall Street blue-whales, had downgraded its outlook for US economic growth for 2022 to 3.8 per cent, as an unjustified panic was reportedly mounting among US businesses regarding emergence of Omicron variant even as the WHO (World Health Organization) had assuaged that available vaccines would be able to prevent hospitalization in B.1.1.529 or Omicron-infected patients.

Besides, Joseph Briggs, an economist of Goldman Sachs, one of 29 US lenders that could directly borrow from the US Federal Reserve, was quoted saying in a client note shortly after the announcement that the variant which is about six-times more transmissible than delta variant, might slow down economic reopening, while an increase in online shopping during Black Friday sales had underlined an upscaled caution among US consumers.

Goldman Sachs trims 2022 US GDP growth forecasts

According to Goldman Sachs’ latest projection, US economy is expected to grow by 3.8 per cent in 2022, down from a 4.4 per cent estimated earlier on October this year, while fourth-quarter GDP (Gross Domestic Product) growth estimate was trimmed to 2.9 per cent from a prior forecast of a growth of 3.3 per cent.

Meanwhile, citing that an ongoing labor shortage would highly likely to last longer as Americans’ voluntary job quits had surged to a record in October with US household wealth chartering at a record following release of trillions of dollar worth of papers before and after the November US Presidential election, often dubbed as fiscal stimulus, which had been printed on the heels of a record budget deficit that ought to be paid off in tax receipts from Americans’ hard-fought earnings in a pandemic-era new normalcy, Goldman analysts Briggs said in the client note, “While many questions remain unanswered, we now think a moderate downside scenario where the virus spreads more quickly but immunity against severe disease is only slightly weakened is most likely”.