J.P. Morgan research raises recession probability amid economic uncertainty
In response to recent economic shifts, J.P. Morgan Research has increased the likelihood of a U.S. and global recession starting before the end of 2024 to 35%, up from 25% in its mid-year outlook.
“Our growth forecast is facing significant challenges,” said Bruce Kasman, Chief Global Economist at J.P. Morgan. “U.S. indicators suggest a sharper-than-expected decline in labor demand and early signs of job cuts. Additionally, the latest business surveys reveal a slowdown in global manufacturing and the Euro area, both of which we had expected to strengthen this year. However, these pressures are being offset by continued robust growth, particularly in the service sector.”
Kasman also noted that the typical warning signs of a slowdown—such as sustained profit margin declines, credit market stress, and shocks in energy or financial markets—are currently absent. “Therefore, we’ve only slightly raised our near-term recession risk to 35%,” he explained.
Looking further ahead, the likelihood of a recession by the end of 2025 remains at 45%. “While we acknowledge added uncertainties related to the political environment, our assessment of the probability of a recession by the end of next year remains unchanged,” Kasman concluded.
U.S. Economy Shows Signs of Slowing After a Year of Strong Growth
Following a year of unexpectedly robust growth, the U.S. economy is beginning to show signs of slowing. The July jobs report came in weaker than anticipated, with the unemployment rate increasing for the fourth consecutive month. This has triggered a market sell-off and intensified concerns about a potential recession.
