Goldman lowers its US growth forecasts again

Goldman Sachs has lowered its US second quarter growth forecast again on the back of weak retail sales data.

The bank now expects second quarter gross domestic product growth to be one per cent from 1.3 per cent. As recently as last week, Goldman slashed its forecast from 1.6 per cent.

Citing disappointing retail sales and business inventories, Deutsche Bank has also knocked a percentage point off its second quarter GDP growth estimate to 1.3 per cent.

Paul Dales, senior US economist at Capital Spreads, said that while the sales results were worrying (particularly as there seemed to be a slowdown over the course of the quarter), solid jobs growth, earnings growth and confidence means this slowdown in spending growth may be short lived.