Job data suggests ‘soft landing’ is increasingly likely, economists say

cnbc.com:

The U.S. economy inched closer to a so-called "soft landing" after a new batch of labor data, economists said.

A soft landing is a good thing: It would mean the Federal Reserve has accomplished the difficult task of taming inflation without triggering a recession.

Job openings — a barometer of employer demand for workers — fell by 617,000 to 8.7 million in October, the lowest since March 2021, the U.S. Labor Department reported Tuesday in its monthly Job Openings and Labor Turnover Survey.

«Another key ingredient of a sustainably soft landing is falling into place,» Jason Furman, a professor at Harvard University and former chair of the White House Council of Economic Advisers during the Obama administration, wrote about job openings.

On its face, a weakening labor market may sound like bad news. But that trend is by design.

The Fed started raising borrowing costs aggressively in early 2022 to tame stubbornly high inflation. By raising interest rates to their highest level since 2001, the central bank has aimed to cool the economy and the labor market.

The Fed has been walking a tightrope: bringing down inflation from four-decade highs without causing an economic downturn. The opposite — a hard landing — would mean recession.

A soft landing is like "'Goldilocks' porridge'" for central bankers," Brookings Institution economists wrote recently. In this scenario, the economy is «just right — neither too hot (inflationary) nor too cold (in a recession),» they said.

«It's absolutely the best possible outcome,» said Julia Pollak, chief economist at ZipRecruiter. «And I think the chances [for it] get higher and higher all the time. We are very, very close.»

There is no official definition for a soft landing. According to