New York (CNN Business) Goldman Sachs (GS) slashed its forecast for US economic activity in the second half of the year, pointing to sluggish consumer spending on services as well as the threats posed by the Covid-19 Delta variant. But in normal times, consumers spend much more on services like concerts or dining out —and the big spending on goods that has defined the pandemic recovery so far isn't sustainable to keep the US economy growing. That's why rotation is necessary in how people spend their cash, said Goldman Sachs economist Ronnie Walker on Monday in a note to clients. But fears around the Delta variant are keeping services spending down. "The services categories where spending remains depressed are generally either associated with high virus risk, such as live entertainment events, or connected to office-based work, such as ground transportation or dry cleaners," Walker wrote.

Source: CNN July 26, 2021 16:52 UTC