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Goldman Cuts U.S. GDP Forecast After Manchin Won’t Back Bill

Goldman lowers its forecast for U.S. GDP growth after Senator Manchin said he won’t support the $2 trillion tax-and-spending plan

Goldman Cuts U.S. GDP Forecast After Manchin Won’t Back Bill
Pedestrians in the Times Square neighborhood of New York. (Photographer: Amir Hamja/Bloomberg)

Goldman Sachs Group Inc. lowered its forecast for U.S. economic growth after Senator Joe Manchin said Sunday he won’t support the $2 trillion tax-and-spending plan that’s the heart of President Joe Biden’s economic agenda.

The bank’s economic research team cut next year’s real GDP forecast to: 

  • 2% from 3% in first quarter
  • 3% from 3.5% in second quarter
  • 2.75% from 3% in third quarter

Manchin’s comments effectively killed Democrats’ plans to pass the legislation as they begin an election year.

Build Back Better bill’s “enactment had already looked like a close call and in light of Manchin’s comments we are adjusting our forecast to remove the assumption that BBB will become law,” Goldman’s economists said in a report Sunday. “A failure to pass BBB has negative growth implications.”

©2021 Bloomberg L.P.