Goldman Lowers US Recession Odds Amid Strong Economic Data

Goldman Sachs Group Inc. economists have lowered the probability of a U.S. recession in the next year from 25% to 20%, following recent positive data on retail sales and jobless claims. This adjustment reflects improved economic resilience, with potential for further reduction to 15% if the upcoming August jobs report, scheduled for September 6, shows favorable results.

The revision comes after a previous increase in recession probability on August 2. Goldman Sachs economists, led by Jan Hatzius, have expressed increased confidence in a 25 basis point rate cut by the Federal Reserve at its next policy meeting. However, they cautioned that an unexpectedly poor jobs report could lead to a more significant 50 basis point rate cut. The optimistic outlook has contributed to a notable surge in U.S. stocks, marking the best weekly performance of the year.