After the latest initial claim and retail sales data were released, Goldman Sachs lowered the possibility of a US recession in the next 12 months from 25% to 20%. Earlier this month, the possibility of a US economic downturn was raised from 15% due to a three-year high in the unemployment rate. Jan Hatzius, Goldman Sachs' chief US economist, said in the report that the reduction of the probability of economic recession from 25% to 20% is mainly because data released since August 2 has not shown signs of economic recession. If the employment report in August looks 'pretty good,' the likelihood of a US economic downturn will be lowered to 15%. Hatzius insists that the Federal Reserve will cut interest rates by 25 basis points in September, but if the employment report falls below expectations, there is no discount for the possibility of a 50 basis point cut in interest rates.