Skip to content
Opinion
Jared Dillian

Team Soft Landing Is Starting to Pull Ahead

It’s starting to look as if the US economy might avoid a deep and painful recession as the Federal Reserve battles to bring down inflation.

Federal Reserve Chair Jerome Powell may prove the naysayers wrong. 

Federal Reserve Chair Jerome Powell may prove the naysayers wrong. 

Photographer: Graeme Jennings/Getty Images

When it comes to the economy, so-called soft landings are as rare as sightings of Halley’s comet. That’s because the Federal Reserve doesn’t have a great track record in raising interest rates to tame inflation without causing a deep and painful recession, otherwise known as a hard landing. But it’s starting to look like the central bank may just pull off the impossible.

It’s a very perplexing time in the field of economics. Activity has contracted, as measured by the official gross domestic product calculations put out by the Commerce Department, but it doesn’t feel like a recession. The economy has added 2.74 million jobs this year through June. This earnings season has shown that many consumer-facing companies such as Starbucks Corp. and Uber Technologies Inc. are enjoying pricing power, and travel companies are experiencing booming demand, with Marriott International Inc. saying hotel occupancy has nearly returned to pre-pandemic levels. If you have taken a flight within the US recently, you have probably noticed that the plane is completely full and the airports are mobbed. Overall, members of the benchmark S&P 500 Index are on track to post record profits for the second quarter.