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London (CNN Business) After a dismal winter, China's economy is showing signs of life. But a recovery in Asia won't paper over problems in the United States and Europe as the world sinks into recession.

See here: Goldman Sachs has significantly downgraded its outlook for the US economy between April and June. The investment bank now expects an annualized rate of contraction of 34% compared to the previous quarter. The last estimate was an already-shocking 24%.

Goldman revised its forecast because it thinks the US labor market collapse will be even worse than anticipated. It now sees the unemployment rate rising to 15% by the middle of the year, compared to 9% before.

The bank has also updated its predictions for an economic rebound between July and September, which it thinks will be stronger than what it had last penciled in. But in the interim, Wall Street is clearly bracing for pain.

The dismal forecast comes on a day of otherwise positive signs

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