Goldman Sachs Lowers US Recession Risk to 20%

Goldman Sachs economists have lowered the likelihood of a U.S. recession within the next year from 25% to 20%, citing recent data on retail sales and jobless claims. If the upcoming August jobs report, scheduled for release on September 6, shows favorable results, the probability of a recession may be further reduced to 15%, which was the estimate prior to an upward revision on August 2. Positive economic indicators have bolstered U.S. stocks, leading to the best performance week this year as retail sales in July rose significantly, and unemployment benefit claims reached their lowest since early July. Additionally, Goldman Sachs economists expressed increased confidence that the Federal Reserve will reduce interest rates by 25 basis points at its September meeting, although a negative surprise in the jobs report could prompt a larger 50 basis point cut.

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