Goldman Sachs economists have lowered the odds of a U.S. recession and boosted confidence back into the U.S. economy following market panic earlier this month.
A group of Goldman economists led by Jan Hatzius increased their probability of the U.S. entering a full-fledged recession over the next 12 months from 25% to 20%, according to FORBES.
They previously hiked their recession model from 15% to 25% at the beginning of August after the U.S. reported a sudden hike in the unemployment rate to 4.3%.
"The data released since August 2—including retail sales and jobless claims this week—shows no sign of recession," Hatzius explained.
In a separate weekend note, Goldman economists led by Ronnie Walker argued that concerns about the health of American consumers "are greatly exaggerated," reinforcing the argument that a recession is not imminent.
"When a recession strikes, it usually strikes quickly," Hatzius said, referring to the initial panic over July's jobs report.
The July jobs report on August 2 triggered the Sahm rule, an indicator tracking changes in the unemployment rate that had previously predicted every U.S. recession. This led to a stock selloff and fears of Fed action, but stronger economic data, like lower unemployment claims and better retail spending, eased concerns.
