From the Hill:
In a Monday research note, the investment bank put the odds of a recession within 12 months at 25 percent, down from 35 percent earlier this year.
Goldman Sachs economist Jan Hatzius attributed the decline to two major factors: the apparent end of the banking crisis triggered by the collapse of Silicon Valley Bank and the recent bipartisan debt ceiling deal.
Hatzuis also noted that the U.S. economy has cranked out “large numbers of jobs while keeping the unemployment rate very close to its pre-pandemic level” of 3.5 percent.
And while the job market is still strong, Hatzuis said that a slowdown from the torrid pace of hiring earlier in the post-pandmeic recovery may help inflation come down to stable levels.
“Each of our preferred measures of labor market balance has now reversed significantly more than half of its post-pandemic overshoot, but most still have some way to go before they are consistent with 2% inflation,” the research note said.
The Goldman Sachs note follows a week of unexpectedly strong economic data, including a robust May jobs gain and a surprising jump in consumer spending.