The United States could still avoid a recessionbut still faces the possibility of “mini-stagflation,” according to John Waldron, president and chief operating officer of Goldman Sachs Group Inc.
(See: Why the odds of the US suffering a recession have fallen)
“This is the best-forecasted recession that hasn’t happened yet and might not happen”Waldron said at the Bloomberg Invest conference. “I often wonder at night: can we really have a recession with 3.5% unemployment? Seems unlikely”.
An outcome for which the company is preparing it’s a “mini stagflation scenario”said. “It won’t be called a recession, but it won’t feel great”because “could persist for a time in which only slow growth would be achieved”.
(See: The scenarios of a possible recession in the United States during 2023)
Many economists have predicted a looming recession as the US Federal Reserve sharply raises interest rates to slow down the economy and counter rising inflation.
The US companies announced more layoffs in the first five months of 2023 that for the full year of 2022 and at the beginning of June, claims for unemployment insurance benefits in the US rose to their highest level since October 2021.
(See: A deep recession is not necessary to curb inflation: expert)
Waldron said at a conference in early June that Goldman faced a sharp slowdown in its investment banking that has led the Wall Street giant to reduce its workforce.
Goldman is preparing what would be its third round of job cuts in less than a year.
(See: The United States enters the ‘limbo’ of the technical recession)