The US economy is pulling off something historic

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The US economy is pulling off something historic
CNN Business
Bryan Mena, CNN
July 25, 2024 at 2:00 PM


The US economy is on the verge of an extremely rare achievement.

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America’s economy is about to stick what’s called a “soft landing,” which is when inflation returns to the Fed’s target without a recession — a feat that’s only happened once, during the 1990s, according to some economists.

The latest GDP report showed that a key gauge of consumer demand picked up in the second quarter to an annual rate of 2.9%, matching the rate in the fourth quarter of 2023 for the strongest pace in two years. A measure of business investment also strengthened in the April-through-June period.

The current health of the American economy shows that the Fed, with Jerome Powell at the helm as chair, has successfully handled inflation so far, with the finish line coming into clear view. The Fed beginning to cut interest rates indicates that central bank officials feel confident that inflation is under control just enough.

The economy’s enduring strength is also a boon for the Biden administration. Despite the Fed aggressively raising interest rates to tamp down inflation, which have been perched at a 23-year high since last July, the economy has so far avoided a recession. Last year, the resilience of the US consumer shocked economists who widely expected an economic downturn to ensue.

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