No imminent recession

“The main reason for our cut is that the recent data have reinforced our confidence that bringing inflation down to an acceptable level will not require a recession,” he said.

The chief economist cited resilient U.S. economic activity, saying second-quarter GDP growth was tracking at 2.3%. The rebound in consumer sentiment and unemployment levels falling to 3.6% in June also added to Goldman’s optimism.

The U.S. economy  at an annualized pace in the first quarter. Last Thursday, data from the Labor Department showed that  fell to 239,000 for the week ended June 24, well below estimates of 264,000 and marking a 26,000 decline from the previous week.

There are also “strong fundamental reasons” to expect the easing of consumer price rises to continue after June’s core inflation, excluding food and energy,  since February 2021.

The investment bank, however, expects some deceleration in subsequent quarters as a result of sequentially slower real disposable personal income growth.

“But the easing in financial conditions, the rebound in the housing market, and the ongoing boom in factory building all suggest that the U.S. economy will continue to grow, albeit at a below-trend pace,” Hatzius said.