Goldman Sachs on Saturday lowered its forecast for economic growth in the United States to 3.8% for 2022, citing risks and uncertainty over the emergence of the Omicron variant of the coronavirus.
Goldman economist Joseph Briggs said in a note that the Omicron variable could slow the reopening of the economy, but the company expects “only a modest drag” on services spending.
Briggs said the company now expects GDP growth for 2022 of 3.8%, down from 4.2% previously on a full-year basis, and fourth-quarter growth of 2.9%, down from 3.3% before.
“While many questions remain unanswered, we now believe that a mild fall scenario where the virus spreads more quickly but immunity to severe disease is only slightly weakened,” he said.
The labor shortage could last longer if people do not feel comfortable returning to work due to the alternative, according to the note. The spread of the virus could exacerbate supply shortages if other countries impose stricter restrictions, but that increased vaccination rates among foreign trade partners would prevent severe disruptions.