US Recession Risks Begin to Rise as War Dims Economic Outlook

Wall Street is cutting its forecasts for the US economy this year, boosting its projections for inflation and unemployment and nudging up the odds of a recession as the impact of the Iran war starts to come into view.

Goldman Sachs Group Inc. says the risk of a downturn over the next 12 months has risen to 30% as a result of the surge in oil prices, and predicts the jobless rate will climb to 4.6% by the end of 2026 from 4.4% in February. Several firms say inflation will now be closer to 3% this year than 2%, eating into disposable incomes and keeping a lid on hiring.