Goldman Sachs has reduced its forecast for the odds of a U.S. recession over the next 12 months, citing a robust September jobs report that beat expectations.
The investment bank now estimates a 15 percent chance of a recession, down from 20 percent, according to a note by chief U.S. economist Jan Hatzius released on Oct. 6.
“We have cut our 12-month U.S. recession probability back to the unconditional long-term average of 15 percent,” Hatzius wrote, noting that the latest employment data has alleviated fears that labor demand was “weakening too quickly to prevent the unemployment rate from trending higher.”
The September jobs report showed payroll gains of 254,000, significantly higher than market forecasts of around 150,000. The unemployment rate fell to 4.1 percent, while annual wage growth rose to 4 percent, signaling labor market resilience and bolstering optimism about the U.S. economy’s ability to sustain growth amid ongoing monetary policy adjustments….