Goldman Sachs Group Inc. Cuts U.S. Recession Chances to 15 Percent

Goldman Sachs Group Inc. sees a 15 percent chance the U.S. will enter into recession, a steep prediction compared to opposing forecasters. Photo Credit: Shutterstock

Posted September 14, 2023

Goldman Sachs Group Inc. reports that the U.S. chances of slipping into recession are now at 15 percent, down from its previous estimates.

The decreased prediction comes following a cooling in inflation in recent months, furthermore, if the Federal Reserve can manage to cut back on increasing rate hikes, the economy has a chance of a “soft-landing,” according to a Goldman Sachs report.

“We are also substantially more optimistic than most forecasters in terms of our baseline GCP growth forecast, which averages 2% through the end of 2024,” Goldman Sachs analyst Jan Hatzius said in the report.

Bloombers’s consensus remains at an opposing 60 percent chance for recession.

In the report, Hatzius said labor market growth and increased rates of real wages could reaccelerate real disposable income in time for next year.

“It is also encouraging that average hourly earnings rose just 0.2% in August, although a further decline in our wage tracker from the current year-on-year rate of 4.4% to around 3½% is probably needed to make Fed officials fully comfortable,” he said.

View the full report, here.