Goldman Sachs lowers the US recession forecast for the next 12 months, judging Iran conflict impact as limited

Gold Financial reports that on May 12th, Goldman Sachs’ latest assessment suggests that the probability of the U.S. economy falling into recession has decreased. Although the Iran situation remains unresolved and the Strait of Hormuz continues to be closed, international oil prices have not surged sharply as some institutions predicted. Coupled with the steady performance of key economic data such as U.S. employment and domestic demand, the overall economic fundamentals remain resilient, and the actual impact of geopolitical events on the real economy is relatively limited.
Goldman Sachs Chief Economist Jan Hatzius officially downgraded the recession forecast in an analysis report released on Monday. The firm lowered the probability of the U.S. economy entering a recession in the next 12 months from 30% to 25%. The main reason is that U.S. economic activity has been more resilient than expected, with Goldman Sachs’ Financial Conditions Index falling below pre-war levels, indicating a generally easing financial environment that strongly supports economic expansion.
Employment data has become an important confirmation of economic stability. The April non-farm payroll report released last week showed that the U.S. added 115k jobs that month, far exceeding the market expectation of 65k; the unemployment rate remained steady at 4.3%. In addition, multiple economic indicators confirm that the impact of the Iran conflict has been relatively mild overall and has not significantly dragged down the U.S. economy.
Hatzius also listed several key data points supporting the downward revision of the recession probability. Although the overall U.S. GDP growth in the first quarter was below market expectations, private domestic sales maintained steady growth, with a year-on-year increase of 2.5%, reflecting the endogenous resilience of domestic demand fundamentals.