Goldman Sachs cuts U.S. recession odds to 25% on strong labor market

Stacked containers are shown as ships unload their cargo at the Port of Los Angeles
Stacked containers are shown as ships unload their cargo at the Port of Los Angeles in Los Angeles, California, U.S. November 22, 2021. REUTERS/Mike Blake/File Photo

NEW YORK, Feb 6 (Reuters) - Goldman Sachs (GS.N) said on Monday it now sees a 25% probability of the United States entering a recession in the next 12 months, down from a previous 35% forecast.

"Continued strength in the labor market and early signs of improvement in the business surveys suggest that the risk of a near-term slump has diminished notably," the bank said in a research note.

The updated forecast follows an employment report on Friday that showed U.S. job growth accelerated sharply in January while the unemployment rate hit more than a 53-1/2-year low of 3.4%, pointing to a stubbornly tight labor market.

Economists polled by Reuters in December put a 60% probability on a recession taking place in 2023.

Reporting by Davide Barbuscia; Editing by Sandra Maler

Our Standards: The Thomson Reuters Trust Principles.

Read Next