Economic outlook: Goldman cuts recession odds to 20% from 25%

If the August jobs report, due out on September 6, “looks reasonably good, we would probably reduce our probability of a recession back to 15%, where it has been for almost a year,” before a revision on August 2, Goldman economists led by Jan Hatzius said in a report to clients on Saturday.

A series of data showing U.S. economic resilience led stocks to their best week this year as buyers stepped in after a recent disappointment. The value of retail sales rose in July by the most since the start of 2023. Separate government figures showed the fewest jobless claims last week since the start of July.

Goldman economists also said they had become “more confident” that the Federal Reserve will cut interest rates by 25 basis points at its September policy meeting, “although another negative jobs surprise on September 6 would could still trigger a 50 basis point move”.