Goldman Sachs Lowers Odds of U.S. Recession to 20% Amid Positive Economic Data - What Does This Mean for Your Investments?
In a recent update, Goldman Sachs has revised the probability of the United States slipping into a recession within the next 12 months to 20% from 25% based on the latest jobless claims and retail sales reports. This news comes after the brokerage initially raised the odds of a recession to 15% earlier this month due to a spike in the unemployment rate in July.
Chief U.S. economist Jan Hatzius stated that the data released since August 2nd shows no signs of a recession, prompting the adjustment in probability. He also mentioned that if the August jobs report reflects positive numbers, the recession probability could be further reduced to 15%. Additionally, Hatzius predicts that the Federal Reserve will likely cut interest rates by 25 basis points at its September meeting, with a possibility of a 50 bps cut if the jobs report underperforms.
The recent jobless claims report revealed a decrease in the number of Americans filing for unemployment benefits, while retail sales saw a significant increase in July. This positive economic data has contributed to the reassessment of the recession likelihood by Goldman Sachs.
In conclusion, the lowered odds of a U.S. recession suggest a more stable economic outlook, which could impact various investment decisions. As an investor, it is important to stay informed about the latest economic indicators and expert analyses to make well-informed financial choices.