Aug 18 Reuters Goldman Sachs has lowered the odds of the United States slipping into a recession in the next 12 months to 20 from 25 following the latest weekly jobless claims and retail sales reports.

Earlier this month, the brokerage raised the odds of a U.S. recession from 15 after the unemployment rate jumped to a threeyear 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.

Thursday39;s jobless claims report showed number of Americans filing for unemployment benefits dropped to a onemonth low in the previous week, while separate data revealed on the day that retail sales increased by the most in 112 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

Source Reuters