Bank of America slashes expected US GDP growth rate

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“That would break a streak of six consecutive quarters of growth that began in the summer of 2020,” said the Bank of America report….reports Asian Lite News

Bank of America slashed its projection for the first-quarter US economic growth from 4 to 1 per cent on Friday because of disruptions caused by the Omicron coronavirus variant.

Economists at Bank of America told clients in a report that they expect US gross domestic product (GDP) to rise at an annual rate of 1 per cent during the first quarter, as “risks of a negative growth quarter are significant”, Xinhua news agency quoted a CNN Business report as saying.

“That would break a streak of six consecutive quarters of growth that began in the summer of 2020,” said the report.

Meanwhile, the Atlanta Federal Reserve’s GDPNow forecasting model, released on Friday, projected a 0.1 per cent growth in the first quarter, a rapid slowdown from the 6.9 per cent annual rate of growth during the final quarter of 2021.

For the year as a whole, Bank of America sees a US GDP growth of 3.6 per cent, down from its prior expectation of 4 per cent, citing the Omicron surge, along with the expected path of inventories and the outlook for fiscal spending, which is set to slow sharply.

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