Is a U.S Recession on the horizon? Here's what JP Morgan Predicts

JPMorgan Chase has just updated its recession forecast for 2024, and it's not good news.

The banking giant now sees a 35% chance that the US economy will slip into a recession by the end of 2024.
The forecast has been revised upwards since last month when it was just a 25% chance of a recession.

JPMorgan economists noted that recent data from the US reveals a sharper-than-expected weakening in labor demand and early signs of labor shedding.

But that's not all. The odds of U.S going into recession by the second half of 2025, are pegged as high as 45%.

Meanwhile, there's also a significant change in the interest rate outlook. JPMorgan now sees just a 30% chance of the Federal Reserve keeping interest rates 'high-for-long', down from a 50-50% chance two months ago.
With inflation pressures easing, they even predict the Fed might cut rates by half a percentage point in September as well as November.

A recession means potential job losses and economic uncertainty. CEO Jamie Dimon talking to CNBC, highlighted several risks, including geopolitical issues, housing market concerns, and upcoming elections, which add to the uncertainty.

The labor market is showing signs of strain, which could accelerate recessionary pressures. While inflation is cooling, the broader economic outlook remains mixed, with significant risks on the horizon.

Interestingly, JPMorgan's new recession risk calculation follows a similar move by Goldman Sachs, which now sees a 25% probability of a recession within the next year.

Both financial giants are recalibrating their forecasts in light of evolving economic data.

As always, we'll keep you updated with the latest developments. Be sure to subscribe and hit the notification bell to stay informed about the US economy and how it impacts your financial future.