A surge in imports and slower consumer spending reduced U.S. economic growth in the second quarter, according to economists at Goldman Sachs Group Inc.
The world’s largest economy grew at a 2 percent annual pace from April through June, down from a previously estimated 3 percent pace, according to revised estimates by Goldman economists. Forecasts for the second half of the year remained at an average 1.5 percent pending the government’s annual revisions to gross domestic product due July 30.
“At that point, we may need to make downward revisions, judging from the relentless run on disappointments in recent weeks,” Ed McKelvey, a senior economist at Goldman Sachs in New York, wrote in a July 16 note to clients. “While it is conceivable that the slowdown will prove fleeting, several factors strongly suggest otherwise.”
Among the issues that will damp growth in the second half are the loss of support from fiscal stimulus and inventory replenishment, the excess supply of vacant housing, state and local budget constraints, a lack of credit, and weak employment gains, McKelvey said.
The cut in the growth forecast follows similar reductions by economists at JPMorgan Chase & Co. and UBS Securities LLC in New York.
Business, Pages 20 on 07/20/2010