us.cnn.com
Goldman Sachs Raises US Recession Probability to 35% Amidst Rising Tariffs
Goldman Sachs increased its US recession probability to 35% within the next 12 months, primarily due to President Trump's escalating tariffs that threaten to stunt growth, raise inflation, and increase unemployment, significantly impacting consumer and business confidence.
- What is the immediate impact of Goldman Sachs's increased recession probability forecast on the US economy?
- Goldman Sachs raised its US recession probability to 35% due to surging tariffs, impacting consumer confidence and potentially leading to higher unemployment and inflation. The bank also increased its inflation estimate and lowered its 2025 GDP forecast to 1%.
- How do President Trump's trade policies and tariff increases contribute to Goldman Sachs's revised economic outlook?
- The increased tariff assumptions, driven by President Trump's trade policies, are the primary cause for Goldman Sachs's revised economic outlook. This reflects a sharp deterioration in household and business confidence, with consumer sentiment showing the highest percentage of Americans expecting rising unemployment since the Great Recession.
- What are the long-term implications of the current economic situation for consumer spending, inflation, and unemployment?
- Aggressive reciprocal tariffs averaging 15% across US trading partners will likely boost consumer prices, further eroding inflation-adjusted income. The Fed is expected to counteract this with three rate cuts this year, but the overall impact on the US economy remains uncertain, with a significant risk of recession.
Cognitive Concepts
Framing Bias
The article frames the potential recession primarily through the lens of Goldman Sachs' predictions and Trump's trade policies. The headline and opening sentences immediately establish this focus. While other perspectives are mentioned, the emphasis is clearly on the negative economic consequences of the tariffs, potentially influencing the reader to perceive the situation as more dire than it might be based solely on this one firm's assessment. The sequencing of information highlights Goldman Sachs' predictions early, strengthening the framing of this concern.
Language Bias
The language used is generally neutral, though words like "surging tariffs," "threaten to stunt growth," and "reignite inflation" have negative connotations. The phrase "historic tax increase" is loaded, emphasizing the potentially negative financial impact. More neutral alternatives could include: 'increasing tariffs,' 'potentially slowing growth,' 'increase inflation,' and 'substantial tax increase'.
Bias by Omission
The analysis focuses heavily on Goldman Sachs' predictions and statements from Trump administration officials. Other perspectives from economists or businesses outside of Goldman Sachs are mentioned but not deeply explored. The impact of tariffs on specific industries or demographics is largely absent. Omitting these perspectives limits a comprehensive understanding of the issue.
False Dichotomy
The article presents a somewhat simplified view by focusing primarily on the potential for a recession driven by tariffs. While acknowledging some economists hold differing views, it doesn't fully explore alternative economic factors that could contribute to or mitigate a recession. The framing leans heavily towards a 'tariffs cause recession' narrative, potentially overshadowing other potential economic drivers.
Sustainable Development Goals
The article discusses the potential for a US recession due to rising tariffs, which would negatively impact job growth and economic prosperity. Increased unemployment, as projected by Goldman Sachs, directly contradicts the SDG target of sustained, inclusive, and sustainable economic growth, and decent work for all. The projected decline in GDP further supports this negative impact.