U.S. Economy Nears Soft Landing Amid Lingering Challenges

Soft Landing Becomes More Likely

Recent economic indicators suggest the U.S. is moving closer to achieving a soft landing—curbing inflation without falling into recession. Once considered improbable, this outcome is now more plausible than ever.

Inflation Remains a Concern

While inflation has cooled significantly, the core PCE index favored by the Federal Reserve remains near 3%. Analysts expect limited further progress this year due to ongoing price pressures from tariffs and other factors.

Labor Market Uncertainty Looms

Though recent job reports appear robust, some economists warn that the labor market may not be as stable as it seems. Unemployment could rise in the coming months, signaling hidden fragility beneath the surface.

• Core PCE annual rate nears 3%
• Inflation return to target remains a challenge
• Labor market strength may be overstated