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Goldman Sachs just tweaked its outlook for the U.S. economy, cutting the chance of a recession in the next year from 25% down to 20%. This comes on the back of solid retail sales data and lower-than-expected jobless claims.  The signals aren’t all rainbows and sunshine, but they’re good enough to make the economists at Goldman, led by Jan Hatzius, rethink the odds. If the August jobs report, set to drop on September 6, doesn’t disappoint, they might cut that recession probability even further, potentially down to 15%. That’s where it sat comfortably before they bumped it up earlier this month. U.S. economic indicators keep market on its toes The latest batch of economic data has been enough to get Wall Street buzzing. Stocks had their best week of the year, driven by investors looking to scoop up bargains after a recent sell-off.  Retail sales in July showed a solid jump, the biggest since early 2023, signaling that consumers are still spending despite higher prices and borrowing costs.  That’s a good sign for the economy, considering consumer spending makes up a huge percentage of U.S. economic activity. On top of that, fewer people filed for unemployment benefits last week than at any time since early July. That’s another sign the job market is holding up, even if job growth has been slowing down a bit.  But it’s worth noting that the job market still has some cracks. Nonfarm payrolls increased by 187,000 in July, which is below what experts had been expecting. The Fed’s next move in the crosshairs Goldman’s economists are also weighing in on what they think the Federal Reserve might do next. They’re becoming more confident that the Fed will cut interest rates by 25 basis points at their September meeting.  But, like everything else, it’s going…

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Filed under: News - @ August 19, 2024 2:20 pm