The U.S. economy is on the brink of a “soft landing,” avoiding recession despite a slowdown in growth and inflation, according to National Retail Federation Chief Economist Jack Kleinhenz. The Federal Reserve’s anticipated rate cuts signal positive adjustments ahead, as the economy continues to grow and inflation remains manageable.
Kleinhenz noted that despite a rise in unemployment and manufacturing slowdown in August, recent data has eased recession fears. Annual GDP growth for Q2 was revised upward to 3%, and consumer spending showed resilience with a revised 2.9% growth. Inflation, measured by the Personal Consumption Expenditures Price Index, held steady at 2.5%, close to the Fed’s target.
While job growth has slowed, with only 114,000 jobs added in July and unemployment rising to 4.3%, these figures remain within normal ranges. The Fed’s expected rate cuts could bolster consumer spending and stabilize economic conditions, benefiting households and the housing market. Despite cautious consumer behavior, these factors are set to support spending and demand for goods and services throughout the year.
