November jobs report disappoints after recent gains

Goldman Sachs on Saturday cut its outlook for U.S. economic growth to 3.8% for 2022, citing risks and uncertainty around the emergence of the Omicron variant of the coronavirus.

Goldman economist Joseph Briggs said in a note that the Omicron variant could slow economic reopening, but the firm expects “only a modest drag” on service spending.

The firm now sees 2022 gross domestic product (GDP) growth of 3.8%, down from 4.2% previously on a full year basis, and Q4/Q4 growth of 2.9%, down from 3.3% before, Briggs said.

“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,” he said.
Worker shortages could last longer if people do not feel comfortable returning to work due to the variant, according to the note.

Goldman pointed the spread of the virus could worsen supply shortages should other countries implement tighter restrictions, but increase in vaccination rates among foreign trade partners would prevent severe disruptions.
Goldman Sachs’ U.S. forecast comes after the International Monetary Fund Managing Director Kristalina Georgieva said on Friday that the lender was likely to lower its global economic growth estimates due to the new Omicron variant of the coronavirus.
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