Goldman Sachs Research analysts estimate that the risk of the economy entering a recession in the next year is 30% in the US, 40% in the Euro area, and 45% in the UK. In this report, they revisit key facts about the frequency and severity of recessions by analyzing 77 recessions in advanced economies since 1961. GS Research analysts find that economic overheating – high unit labor cost growth and high core inflation – combined with large cumulative increases in the policy rate often precede severe recessions. In contrast, elevated private sector financial surpluses often foreshadow less severe recessions.