2024-08-19 04:50:41
(Reuters) – Goldman Sachs cut its odds of a U.S. recession in the next 12 months to 20% from 25%, based on the latest weekly jobless claims and retail sales reports.
Earlier this month, the brokerage firm raised the probability of a U.S. recession from 15% as the U.S. unemployment rate jumped to a three-year high in July, raising fears of a recession.
“We have now lowered our probability from 25% to 20%, primarily because the July and early August data released since August 2 show no signs of a recession,” Jan Hatzius, Goldman Sachs’ chief U.S. economist, said in a note on Saturday.
He added: “Continued expansion would make the United States look more like other G10 economies, where Sam’s rule applies less than 70% of the time.”
A report on jobless claims released on Thursday showed the number of Americans filing new claims for unemployment benefits fell to the lowest level in a month last week, while other data released the same day showed retail sales in July posted the biggest increase in 1-1/2 years.
Hatzius said he would lower his odds of a U.S. recession to 15% if the August jobs report looks “pretty good.”
He insisted that the Fed would cut interest rates by 25 basis points at its September meeting, but did not rule out a 50 basis point cut if the jobs report fell short of expectations.
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#Goldman #Sachs #cuts #chance #U.S #recession #Reuters
