{"id":118768,"date":"2021-07-26T21:16:08","date_gmt":"2021-07-26T21:16:08","guid":{"rendered":"https:\/\/fin2me.com\/?p=118768"},"modified":"2021-07-26T21:16:08","modified_gmt":"2021-07-26T21:16:08","slug":"dow-sinks-more-than-700-points-on-delta-variant-fears","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/dow-sinks-more-than-700-points-on-delta-variant-fears\/","title":{"rendered":"Dow sinks more than 700 points on Delta variant fears"},"content":{"rendered":"<p><cite>New York (CNN Business)<\/cite><span>Goldman Sachs<\/span> <span>(<span>GS<\/span>)<\/span> slashed its forecast for US economic activity in the second half of the year, pointing to sluggish consumer spending on services as well as the threats posed by the Covid-19 Delta variant.<\/p>\n<p>During the pandemic and the start of the recovery, Americans spent big on goods: Used car prices soared, as did prices for furniture and other household items, in response to surging demand and shortages of materials.<br \/>\nBut in normal times, consumers spend much more on services like concerts or dining out \u2014and the big spending on goods that has defined the pandemic recovery so far isn&#8217;t sustainable to keep the US economy growing.<\/p>\n<ul><\/ul>\n<p>That&#8217;s why rotation is necessary in how people spend their cash, said Goldman Sachs economist Ronnie Walker on Monday in a note to clients. But fears around the Delta variant are keeping services spending down.<\/p>\n<ul><\/ul>\n<p>&#8220;The services categories where spending remains depressed are generally either associated with high virus risk, such as live entertainment events, or connected to office-based work, such as ground transportation or dry cleaners,&#8221; Walker wrote.<\/p>\n<p>In response, Goldman slashed its gross domestic product growth forecast, the widest measure of economic activity, by one percentage point in both the third and fourth quarters.<br \/>\nBetween July and September, the Wall Street bank expected 8.5% annualized growth, before dropping to 5% in the last three months of the year. For the full year, Goldman predicts 6.6% GDP growth.<br \/>\nFrom 2022 on, the pace of expansion will slow further, trending back toward the 1.5% to 2% annualized growth what the nation typically saw before the pandemic.<br \/>\nEven though roughly half of Americans are fully vaccinated, cases are rising. In 48 states, the rate of new Covid-19 cases in the past week jumped by at least 10% compared to the previous week, according to data from Johns Hopkins University. In 34 of those states, the rate of new cases increased by more than 50%.<br \/>\nThe rise of infections through the variant is coming at an inopportune time: The economy is still not back to normal, and the resurgence of infections could keep people from fully participating in the economy.<\/p>\n<ul><\/ul>\n<p>&#8220;While most consumers appear to be comfortable returning to high-contact services, some are still hesitant,&#8221; said Walker. &#8220;They are likely to remain cautious for now as the spread of the Delta variant keeps Covid fears alive, delaying a full recovery.&#8221;<br \/>\nAt the same time, Goldman&#8217;s economists believe the Delta variant&#8217;s impact on the economy will be somewhat limited: &#8220;Appetite for new government-mandated restrictions appears low; early state-level evidence shows little impact on consumer spending so far; and the virus situation already appears to be improving in the United Kingdom and other countries where it spread earliest,&#8221; Walker wrote.<br \/>\nSource: <a href=\"https:\/\/edition.cnn.com\/2021\/07\/26\/economy\/goldman-sachs-services-economy-delta\/index.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>New York (CNN Business)Goldman Sachs (GS) slashed its forecast for US economic activity in the second half of the year, pointing to sluggish consumer spending [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":118767,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - 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