Coming into 2023, a common narrative among economists and investors was that the economy was in danger of entering a downturn as a result of the Federal Reserve’s months-long effort to swiftly raise borrowing prices in an effort to contain inflation.
More than 500,000 jobs were added by employers in January, the housing market appears to be stabilizing or perhaps recovering, and many Wall Street experts have decreased the likelihood of a slump this year. Analysts are exploring the idea that there won’t be any soft landing at all—that growth will just hold up—after months of debating whether the Fed could manage one in which the economy slows but does not enter a brutal recession.
The manufacturing sector is still down, consumer spending has been sputtering, and some economists still believe that a minor recession this year is still inevitable.
Although analysts are beginning to wonder whether growth and the labor market may run too hot for inflation to decrease as much as central bankers are anticipating, which would eventually force the Fed to act more forcefully, a soft landing would be a welcome development.