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JPMorgan Raises Recession Odds to 35%

Easing Labor Market Signals Economic Weakness

JPMorgan Chase & Co. has increased its probability of a US recession by the end of this year to 35%, up from its previous estimate of 25%. The bank cites an easing labor market as a key factor in its revised forecast.

According to JPMorgan's midyear outlook, the probability of a US recession has risen to 35%, reflecting concerns about the weakening job market. The bank notes that unemployment claims have increased in recent months and that job growth has slowed significantly.

“The labor market is now showing signs of a slowdown,” JPMorgan economists wrote in a research note. “This is a key indicator of economic weakness, and it suggests that the economy could be headed for a recession.”

The bank also points to other factors that it believes could contribute to a recession, including the ongoing trade war between the US and China, the Federal Reserve's decision to raise interest rates, and slowing global growth.

“The combination of these factors is creating a perfect storm for a recession,” said JPMorgan economist Bruce Kasman. “We believe that the probability of a recession in the next six to 12 months is now 35%.”