WASHINGTON, Sept. 8 (Xinhua) -- The U.S. economy "has cooled significantly" as a result of the rapidly spreading Delta variant, the diminishing fiscal impulse and lingering supply constraints, according to Gregory Daco, chief U.S. economist at Oxford Economics.

"With peak growth now in the rearview mirror, rising health concerns and lingering supply constraints are fomenting worries about the path forward for the economy," Daco said Wednesday in a report on U.S. economic forecast.

"Notably, economic data on the labor market and consumers point to softer economic activity in July and August amid a fourth wave of COVID infections," he said.

Daco said his firm now expects the U.S. economy to grow at an annual rate of 2.7 percent in the third quarter, lower than the previous estimate of 6.5 percent.

The firm also downgraded its growth forecast for the U.S. economy in the fourth quarter to around 4.5 percent, lower than 5.4 percent previously estimated.

That marked a significant slowdown for the U.S. economy, which grew at an annual rate of 6.6 percent in the second quarter.

The revised forecast came after the U.S. Labor Department reported last week that U.S. employers added fewer-than-expected 235,000 jobs in August, with unemployment rate dropping to 5.2 percent.

"The labor market recovery cooled markedly in August as businesses and jobseekers grew more cautious in the face of the fast-spreading Delta variant," Daco said.

A Federal Reserve survey released Wednesday also showed that U.S. economic growth "downshifted slightly" to a moderate pace in early July through August amid a Delta variant-fueled COVID-19 surge.

"The deceleration in economic activity was largely attributable to a pullback in dining out, travel, and tourism in most Districts, reflecting safety concerns due to the rise of the Delta variant," the Fed said in its latest survey on economic conditions, known as the Beige Book, based on information collected from its 12 regional reserve banks.

"The other sectors of the economy where growth slowed or activity declined were those constrained by supply disruptions and labor shortages, as opposed to softening demand," the Fed said.

The Fed has pledged to keep its benchmark interest rate unchanged at the record-low level of near zero, while continuing its asset purchase program at least at the current pace of 120 billion U.S. dollars per month until "substantial further progress" has been made on employment and inflation.

Daco estimated that the Fed will start tapering its asset purchases in December or January, depending on how the Delta variant impacts the U.S. economy. Enditem

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