Filings for bankruptcy have increased by over 25% at this enormous bank, which is increasing the likelihood of a recession.
Goldman Sachs economists are now projecting a more severe economic slump for the US economy by year’s end.
The Straits Times writes that the banking giant’s analysts have increased the likelihood of a recession happening in the next few months from 15% to 25%, citing the spike in jobless numbers.
On the other hand, there is some good news.
According to Goldman Sachs, the US job market could benefit from a rate drop from the Federal Reserve if implemented at the right moment.
Our prediction is based on the assumption that August will see a recovery in job growth and that the Federal Open Market Committee will determine that 25 basis-point cuts are enough to counteract any negative risks.
The likelihood of a 50 basis-point drop in September increases if our prediction that the August employment data will be just as bad as the July report is incorrect.
The Daily Hodl states that the influence of the Federal Reserve’s “higher for longer” strategy toward interest rates is not limited to the labor market.
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“Overall, the number of bankruptcies filed in the nation increased by 24%, from 35,727 in July 2023 to 44,427 last month, according to a press release from US bankruptcy data provider Epiq AACER,” the news source states.
In response to the findings, Epiq AACER VP Michael Hunter issued the following statement:
Bankruptcy filings have been rising sharply and consistently recently, which is a reflection of the persistent financial difficulties that people and companies are experiencing.
I anticipate that the number of bankruptcies will stay consistently high throughout the rest of 2024 and into 2025, given the present patterns and economic data.
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