The latest employment figures released by the government show a mixed picture, with some positive signs despite temporary disruptions caused by hurricanes and labor strikes. The job market in the United States is experiencing a cooling trend rather than a sharp decline, with inflation returning to more stable levels.
Economists describe this situation as a 'soft landing,' a rare occurrence that has only happened once in the mid-1990s. The focus now shifts from when the US economy will achieve a soft landing to how long this period of stability can be sustained. Some experts, including former Federal Reserve Bank officials and major financial institutions like JPMorgan Chase, have already declared that a soft landing is underway.
The Federal Reserve's preferred inflation index showed a modest increase of 2.1% for the year ending in September, slightly lower than the previous month and close to the Fed's target of 2%. This marks a significant decrease from the peak inflation rate of 7.2% recorded in June 2022.
While the October jobs report may not have been stellar, it does not indicate a significant downturn in the job market. Economist Lauren Goodwin noted that the labor market has largely stabilized, although a definitive turning point has not yet been reached.
There is optimism that the October payroll growth figures will be revised upwards, and the unemployment rate remained steady at a low 4.1% in October. Additionally, new applications for unemployment benefits continue to remain at historically low levels.
In conclusion, the US economy appears to have achieved a soft landing. The key question now is how long this period of stability can be sustained.
