A year ago, the US was in a recession, but recent data has shown a soft landing where growth falls below the trend in 2024 but remains positive.

The Federal Reserve’s interest rate hikes, falling housing investment, and other factors have led to a slowdown in economic momentum.

The unemployment rate of 3.5% in July is lower than many analysts projected, and professional economic forecasts have corrected their forecasts.

The Fed’s staff has downgraded the outlook, citing recession as a “plausible” outcome last December and projecting a recession this year at the March 2023 meeting.

The July 25-26 meeting mood improved, but the staff no longer judged that the economy would enter a mild recession toward the end of the year.

However, they still expected the economy to decline to a growth rate below its long-term potential in 2024 and 2025 with inflation decreasing and risks tilted to the downside.