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By Aliss Higham
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The chances of the United States going into a recession have risen, reflecting growing concerns regarding economic fallout from geopolitical uncertainty, rising oil prices and slowed job growth.
Goldman Sachs has raised its 12-month recession probability to 25 percent after a weak February jobs report and rising oil prices, according to reports.
Newsweek has contacted Goldman Sachs via email outside of regular working hours.
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Why It Matters
The National Bureau of Economic Research defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, income, employment, industrial production, and wholesale-retail sales.
Goldman Sachs’ higher recession odds point to mounting economic pressure from slower job growth, tariff-related inflation, and oil disruptions linked to the U.S. and Israel's Operation Fury war in Iran.
What To Know
Goldman Sachs lifted its 12-month US recession probability to 25 percent, up five points from January, citing a February payroll decline of 92,000, softer labor-market trends, and higher oil prices.
Elsewhere, betting platform Kalshi has raised its probability of a recession to 32.4 percent. Polymarket currently has a 31 percent chance of a recession in the U.S. before the end of 2026, down slightly from 35 percent over the weekend.
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Goldman said its estimate of underlying job creation is barely above zero and below the roughly 70,000 jobs per month it says are needed to keep unemployment steady, Fortune reported. It also predicted the unemployment rate, which ticked up to 4.44 percent in February, could reach 4.6 percent by the third quarter.
Goldman’s baseline oil forecast sees Brent crude near $98 per barrel in March and April before easing to $71 by year-end, with a worst-case one-month Strait of Hormuz disruption pushing prices over $100 per barrel and headline inflation near a 4.5 percent spring peak, Fortune reported.
Goldman estimates that tariffs have added more than 70 basis points to core inflation, complicating the Fed’s ability to cut rates soon, while also noting that underlying core inflation metrics net of tariff effects appear more contained, Fortune reported.
In January, Goldman Sachs Research projected 2026 GDP growth above consensus and lowered its 12‑month recession odds to 20 percent.
What People Are Saying
White House Spokesman Kush Desai previously told Newsweek: "The President has been clear about short term disruptions due to Operation Epic Fury even as U.S. and allied forces make stunning progress against the Iranian terrorist regime. The long run trend, however, has been clear: President Trump’s economic agenda continues to unleash robust private sector job, investment, and economic growth that’s driving America’s resurgence. As the President’s tax cuts and deregulation continue taking effect, and as trillions in investments continue materializing, Americans can rest assured that the best is yet to come.”
Mark Zandi, chief economist at Moody’s Analytics, previously told Newsweek: “Higher oil prices have already lifted gasoline prices, and with higher diesel and jet fuel prices, inflation for other goods and travel will soon rise. Long-term rates, including mortgage rates, have also risen as bond investors worry about the inflationary effects of events. Stock prices have also taken a hit. All of this will hurt consumers' willingness and ability to spend, particularly by lower and middle-income households. If this weakening in demand causes businesses to begin laying off workers, a recession will become more likely than not.”
What Happens Next
Energy prices tied to Middle East supply risks will remain a key swing factor for inflation and policy, with any disruption to the key shipping lane, the Strait of Hormuz, likely to raise near-term recession odds.
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