Goldman Sachs Lowers U.S. Recession Odds to 20%
Recent Labor Market Data Sparks Reassessment
Goldman Sachs Cuts Probability Forecast
Goldman Sachs has reduced its forecast for the probability of a U.S. recession in the next 12 months to 20%, down from its previous estimate of 25%.
This adjustment comes shortly after the firm raised its recession probability from 15% to 25%. The change was prompted by fresh labor market data that led to a reassessment of the economic outlook.
The data showed that initial jobless claims fell by 6,000 to 183,000 for the week ending June 25th, indicating continued strength in the labor market.
Factors Contributing to the Reassessment
- Strong labor market data
- Recent retail sales growth
- Easing of supply chain disruptions
These positive economic indicators have led Goldman Sachs economists to believe that the risk of a recession has diminished.
Implications for the Economy
Lowering the recession probability is a positive sign for the U.S. economy. It suggests that growth is expected to continue, albeit at a slower pace than previously anticipated.
However, it is important to note that the risk of a recession is not completely eliminated. Economic conditions can change rapidly, and factors such as the ongoing pandemic and geopolitical uncertainties could still impact the economic outlook.
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