Goldman Sachs cuts US recession odds next year to 15%

The U.S. economy has a better chance of skirting a recession next year than previously believed, according to Goldman Sachs strategists.

In a Tuesday analyst note, Goldman economists led by Jan Hatzius lowered their probability of a recession starting in the next 12 months to 15% from an earlier 20% forecast, citing cooling inflation and a surprisingly resilient labor market.

"First, real disposable income looks set to reaccelerate in 2024 on the back of continued solid job growth and rising real wages," Hatzius said. "Second, we still strongly disagree with the notion that a growing drag from the ‘long and variable lags’ of monetary policy will push the economy toward recession."