Economists at global investment giant Goldman Sachs have cut their probability of a recession in the United States within the next year to 20%, citing recent retail sales and unemployment data.

In an Aug. 17 report to its clients seen by Bloomberg, Goldman’s economist, led by Jan Hatzius, said the probability is down from their previous estimate of 25% and “would probably cut our recession probability back to 15%, where it stood for almost a year” if the US jobs report for August set to publish on Sept. 6 “looks reasonably good.”

The economists added that they were “more confident” that the US Federal Reserve would cut interest rates by 0.25% when it meets in September but said that “another downside jobs surprise on Sept. 6 could trigger” a 0.5% move.

US stocks surged in the past week on the back of July’s retail sales figures, beating analyst estimates in the biggest bump since early 2023. US Labor Department figures released Aug. 15 also show the number of people filing new unemployment benefit applications fell to a one-month low the week prior.