Goldman Sachs Group Inc. economists revised down their estimates for the U.S. economy this quarter, but predicted it will be back on track in September after some states imposed fresh restrictions to combat the coronavirus.
While consumer spending appears likely to stall this month and next, economists led by Jan Hatzius said other economies have proved it’s possible to resume activity and changes in behavior such as wearing masks will help too.
“A combination of tighter state restrictions and voluntary social distancing is already having a noticeable impact on economic activity,” the economists said in a report published on Saturday.
The economists said they now expect the economy to grow 25% in the third quarter having previously predicted 33%. That would result in the economy slumping 4.6% this year, worse than the 4.2% previously seen.
But the Goldman Sachs economists said they still expected growth of 5.8% next year and now project unemployment will be at 9% at the end of this year, down from the previous estimate of 9.5%.