Economists at Goldman Sachs Group Inc. have reduced the probability of a recession in the U.S. next year from 25 percent to 20 percent, citing data on retail sales and unemployment released this week.
If the August jobs report released on Sept. 6 “looks reasonably good, we would likely lower our recession probability back to 15%, where it has been for nearly a year,” before revising it on Aug. 2, Goldman economists led by Jan Hatzius said in a report to clients on Saturday.
A flood of data showing the resilience of the U.S. economy gave stocks their best week this year, with buyers stepping in after a recent slump. The value of retail sales rose in July by the most since early 2023. Independent government figures last week showed the smallest number of jobless claims since early July.
Goldman economists also said they had become “more confident” that the Federal Reserve would cut interest rates by 25 basis points at its September policy meeting, “although another surprise in the jobs numbers on Sept. 6 could still trigger a 50 basis point move.”
