Japan Factory Output Unexpectedly Falls 1.7% in August 
South Korea Exports Set for 16th Monthly Gain on AI Chip Demand 
Fed’s Williams Signals One More Rate Hike Before Year-End 
China Cuts Tariffs on U.S. Farm Goods but Excludes Soybeans 
BlackRock’s Rick Rieder Favors Bonds Over Stocks as Treasury Yields Surge 
Asian Currencies Weaken as Dollar, Oil Prices Rise 
Gold Prices Slip as High Treasury Yields Weigh on Bullion 
BOJ Signals Faster Rate Hikes as Inflation Risks Grow 
UK Housebuilder Stocks Surge on New First-Time Buyer Loan Scheme 
Asian Stocks Fall as Bond Yields and Oil Prices Surge 
Oil Prices Slide as Middle East Flows Recover 
Gold Plunges 4% as Treasury Yields Surge and Fed Rate Hike Bets Rise 
Asian Stocks Rise as Bond Yields Ease Ahead of U.S. Inflation Data 
Gold Holds Near Seven-Week Low as Fed Rate Hike Bets Rise 
Trump Eyes $54 Billion South Korean Investment in Alaska LNG 
US Stocks Slip as Treasury Yields Ease, AI Trade Rebounds 
Dollar Eases Near Two-Month High as Yen Rebounds 
Add as a preferred source on Google
U.S. Recession Risk Decreases Amid Job Market Gains
Goldman Sachs has reduced the probability of a U.S. recession within the next 12 months to 15%, down from 20%, after the September employment data showed robust growth. The Labor Department reported the highest job gains in six months, with unemployment falling to 3.8%.
Labor Market Narrative Shift
Goldman Sachs’ Chief U.S. Economist, Jan Hatzius, noted that the September employment report has "reset the labor market narrative," easing concerns about a rapid weakening in labor demand. The strong job gains suggest the unemployment rate is not expected to rise significantly.
Federal Reserve Rate Outlook and Market Reactions
Goldman Sachs forecasts consecutive 25 basis point cuts by the Federal Reserve, targeting a terminal rate of 3.25-3.5% by June 2025. Hatzius also indicated a reduced risk of a more aggressive 50-basis-point cut. Financial markets have increased the probability of a quarter-point rate cut in November, jumping to 71.5% following the jobs report, as per the CME Group's FedWatch tool.
Job Growth Outlook and Economic Trends
Despite some volatility in job numbers, Goldman Sachs sees no clear signs of persistent negative revisions, crediting steady job growth to strong GDP and high job openings. However, the firm cautions that October's data may be influenced by external factors, such as potential hurricanes and significant strikes, which could affect payroll figures.
Conclusion
With the economy showing resilience through strong job growth and GDP expansion, Goldman Sachs maintains an optimistic outlook on the U.S. economy, while remaining alert to possible short-term disruptions.
