And it's worth repeating: what recession?

On Monday, Goldman Sachs chief economist Jan Hatzius slashed his expectation for a US recession over the next 12 months to 20% from 25%.

It was just 17 days ago when Hatzius lifted his recession probability to 25% from 15%, following a surprisingly weak July jobs report.

The move by Hatzius — and the unwinding of the Yen carry trade — sent shudders across markets worldwide.

Now Hatzius says things don't look as dreary for the US economy as once thought.

"The economy is still doing fine," Hatzius said on Yahoo Finance's Catalysts, pointing to improved economic data and healthy corporate earnings season.

"The lower recession risk has strengthened our forecasts that the Fed will cut by only 25 basis points at the September meeting. That's been our forecast for a long time, but I think with more worries about recession, there was a real possibility that it might be a 50 basis point cut."

Hatzius appears to be right in tempering his concern.

The latest ISM services report, which includes data on business activity, new orders, employment, and supplier deliveries, clocked in at 51.4%, up from 48.8% in June.

Numbers over 50% are seen as positive for the economy. Most companies in the report said business was either flat or expanding gradually.

The number of people in the US submitting new applications for unemployment benefits fell to a one month low last week. The number continued a downtrend seen just a week prior.

Also a week ago the Commerce Department reported that retail sales rose 1.0% in July, the largest increase since January 2023, supported by robust gains in online shopping. Sales in June fell a modest 0.2%.

"The consumer is hanging in there," Walmart (WMT) CFO John David Rainey told me on Yahoo Finance's Morning Brief, moments after better-than-expected earnings from America's largest retailer hit the wire.

Rainey added that the back-to-school shopping season is off to a "good" start.

Corporate earnings season has gone quite well. The majority of well-known public companies are easily beating sales and profit forecasts, not shocking the masses with giant misses. Outlooks have been solid.

Wall Street has begun to move beyond the shock sell-off post jobs report earlier this month, suggesting to clients they dip their toes back into less exuberant waters.

"More resilient growth data, in particular in the August payrolls report, coupled with a Fed that is cutting rates proactively, could shift the market narrative from a soft landing back to Goldilocks. Were that to occur, the market momentum of the past two weeks could continue well into the fall. A reversal would be inevitable, but that’s a forecast for another day," said UBS global wealth management's Jason Draho in a client note.

Three times each week, I field insight-filled conversations with the biggest names in business and markets on my Opening Bid podcast. Find more episodes on our video hub. Watch on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.

In the below Opening Bid episode, former Federal Reserve nominee Judy Shelton reveals her reasons behind wanting to return to the gold standard.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance