Economists at Goldman Sachs on Monday cut their forecast probability of a U.S. recession in the next 12 months from 25% to 20%. “The main reason for our cut is that the recent data have reinforced our confidence that bringing inflation down to an acceptable level will not require a recession,” Goldman Sachs Chief Economist Jan Hatzius wrote in a note to clients.
Hatzius acknowledged that Goldman’s outlook is far rosier than that of economists in the latest Wall Street Journal survey, published on Saturday, which placed a 54% probability of a recession over the coming year. That number remains historically high but also represents a significant drop in recession expectations, from 61% in the prior two Journal surveys. It was the largest month-over-month percentage-point drop recorded in the Journal survey since August 2020.