Goldman Sachs lowered its forecast for the probability of a US recession to 20% shortly after raising it as new labour market data prompted a reassessment of market views on the economy.

Goldman economists earlier this month raised their 12-month U.S. recession probability to 25% from 15% after the July U.S. jobs report, released Aug. 2, showed nonfarm payrolls grew by 114,000 fewer jobs than expected. That’s lower than June’s downwardly revised figure of 179,000 and the Dow Jones estimate of 185,000.

The report sparked widespread concerns about the world’s largest economy and contributed to a sharp — but ultimately brief — stock market plunge earlier this month.

It also triggered the “Sahm ​​Rule,” a historical indicator that shows the initial phase of a recession has begun when the three-month moving average of the U.S. unemployment rate is at least half a percentage point higher than the 12-month low.

Goldman initially cited this as a reason for raising the likelihood of an economic downturn, but changed tack on Saturday, writing in a note that it saw the odds reduced to 20% because data released since Aug. 2 showed “no sign of a recession.”

That included July retail sales, which rose 1% versus an estimate of 0.3%, and weekly applications for unemployment benefits, which were lower than expected.

The figures triggered a change of mood that was reflected in a rally in global stocks at the end of last week.

“A continued expansion would make the US look more like other G10 economies, where the Sahm rule has held less than 70% of the time,” the Goldman economists said Saturday, noting that several smaller economies, including Canada, had seen sizable increases in the unemployment rate in the current cycle without entering recession.

Claudia Sahm, chief economist at New Century Advisors and inventor of the rule, told CNBC that she did not believe the US was currently in a recession, but that further weakening of the labor market could push it into one.

A healthy jobs report released on Sept. 6 would “likely” prompt Goldman to cut its recession probability to 15%, where it had been for nearly a year before August, the bank’s economists said.

Barring another negative surprise in the jobs report, Goldman will be more confident in its forecast for a 25 basis point rate cut at the Federal Reserve’s September meeting, rather than a steeper 50 basis point cut, they added.

Markets have fully priced in a September rate cut by the Federal Reserve, but have reduced the odds of a 50-basis-point reduction to just 28.5%, according to CME’s FedWatch tool.

Rashmi Garg, a senior portfolio manager at Al Dhabi Capital, told CNBC’s “Capital Connection” on Monday that she expected a 25-basis-point cut “unless we see a considerable deterioration in the labor market in the Sept. 6 jobs report.”

—CNBC’s Sam Meredith contributed to this story.