After the latest employment report showed better-than-expected data, goldman sachs lowered the probability of the United States falling into recession in the next 12 months by 5 percentage points to 15%.

The US Department of Labor announced last Friday that in September, the increase in non-farm employment in the United States was the largest in six months, with the unemployment rate dropping to 4.1%.

Goldman Sachs' chief US economist Jan Hatzius said in a report on Sunday that the September employment report "reset the narrative of the job market" and allayed concerns about weakening job demand too quickly and not being able to stop the upward trend in the unemployment rate.

The bank maintains its expectation of the Federal Reserve cutting interest rates by 25 basis points consecutively, with the final rate expected to drop to 3.25-3.5% by June 2025.

"We now believe the risk of another 50 basis point rate cut is much smaller," Hatzius said.

Last month, the Federal Reserve cut the policy rate by 50 basis points to a range of 4.75%-5.00%, marking the first rate cut since 2020.

Following the release of the non-farm payrolls data, the CME Group's FedWatch tool showed that the financial markets raised the probability of a 25 basis point rate cut in November from 71.5% before the report to 95.2%.

Goldman Sachs stated that despite significant fluctuations in employment data, since there are no clear signs indicating further sustained negative revisions in employment data, it is acceptable to interpret the information conveyed by this data on the surface.

"More broadly, we believe that with high job vacancies and strong GDP growth, there is no clear reason for employment growth to be mediocre," Hatzius said.

However, goldman sachs warned that October could be a particularly complex month, with the impact of hurricanes and large-scale strikes potentially depressing employment numbers.