NEW YORK ― Goldman Sachs Group Inc. lowered its forecast for U.S. economic growth in 2011 on signs the recovery in the world’s largest economy lost momentum.
The U.S. will expand 1.5 percent this year, down from a previous forecast of 1.7 percent, Goldman economists in New York including Jan Hatzius said in a note published on Aug. 19. Credit Suisse was also among banks lowering growth forecasts last week.
Federal Reserve surveys showed manufacturing in Philadelphia and New York contracted in August, while a Thomson Reuters/University of Michigan index of consumer sentiment plunged to a three-decade low. Goldman’s change comes amid a monthlong drop in global equities and as Fed Chairman Ben S. Bernanke prepares to speak at the bank’s annual symposium in Jackson Hole, Wyo., this week.
The data “are pointing to even weaker growth ahead,” the economists said. While Bernanke “is likely to be downbeat about recent developments, we expect that he will still argue that the conditions for an acceleration later this year and in 2012 remain in place.”
Goldman forecasts third-quarter growth of 1 percent and a fourth-quarter expansion of 1.5 percent, down from an earlier projection for 2 percent growth in each quarter.
Credit Suisse lowered its forecast for U.S. third-quarter growth to 1.5 percent from from 3.3 percent, and for the fourth quarter to 2.2 percent from 3.1 percent, according to a research note dated Aug. 18. The bank cut its projection for global growth to 3.9 percent in 2011 from 4.1 percent.
JPMorgan Chase & Co. predicts 1 percent growth in U.S. gross domestic product in the fourth quarter, down from an earlier projection of 2.5 percent, the bank said last week. Citigroup Inc. lowered its 2011 growth forecast to 1.6 percent from 1.7 percent.