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Earlier this month, the brokerage raised the odds of a U.S.
recession from 15% after the unemployment rate jumped to a
three-year high in July, sparking fears of a downturn.
"We have now shaved our probability from 25% to 20%, mainly
because the data for July and early August released since August
2 shows no sign of recession," Goldman Sachs chief U.S.
economist Jan Hatzius said in a note on Saturday.
"Continued expansion would make the U.S. look more similar to
other G10 economies, where the Sahm rule has held less than 70%
of the time," he added.
Thursday's jobless claims report showed number of Americans
filing for unemployment benefits dropped to a one-month low in
the previous week, while separate data revealed on the day that
retail sales increased by the most in 1-1/2 years in July.
Hatzius said if the August jobs report seems "reasonably good",
he would cut back the U.S. recession probability to 15%.
He maintains the Federal Reserve will cut interest rates by 25
basis points at its September meeting, but did not rule out a 50
bps cut if the jobs report falls short of expectations.
(Reporting by Roshan Abraham in Bengaluru; Editing by Mrigank
Dhaniwala)
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