JPMorgan Says U.S. Recession Probability Up to 35%

Group 1 - JPMorgan Chase has raised the U.S. recession probability to 35% for an economic downturn by the end of this year, up from 25% [1] - The increase in recession risk assessment is attributed to a sharper-than-expected weakening in labor demand and early signs of labor shedding [1] - JPMorgan maintains a 45% probability of a recession by the second half of 2025 and predicts the Federal Reserve will lower interest rates by 50 basis points in both September and November [1] Group 2 - Goldman Sachs has also revised its recession probability, now estimating a 25% chance of a recession in the next year, up from 15% [2] - Goldman Sachs believes the economy is "fine overall" and notes no major institutional imbalances, indicating the Federal Reserve has leeway to act quickly if necessary [2] - Both JPMorgan and Goldman Sachs highlight a reassessment of the interest rate outlook alongside their changes in recession risk [2] Group 3 - The change in recession probability follows a rise in unemployment to 4.3%, the highest rate since October 2021, which initially caused global markets to tumble [3] - Despite the initial market reaction, the S&P 500 experienced one of its best days of the year shortly after, following a strong weekly jobless claims report [3]