‘Soft Landing’ of Economy Appears More Likely, New Analysis Suggests

WASHINGTON–The U.S. economy grew more than previously thought in the second quarter, data released Thursday shows, “bolstering the case that the country may be experiencing a so-called soft landing,” according to one new analysis.

Gross domestic product grew at a 3% seasonally and inflation-adjusted annual rate, the Commerce Department said in its revised estimate. That is up from the 2.8% rate reported last month, and it is far above the first quarter’s weak 1.4% expansion.

Initial jobless claims for the week ended Aug. 24 also fell slightly, according to the Labor Department, another positive sign for the health of the U.S. economy, noted the Wall Street Journal in its analysis of the newest data.

‘All But Certain’

“Despite the economy's strength, Federal Reserve policymakers appear all but certain to begin cutting rates when they next meet in September,” the Journal stated. “Recent data show that inflation continues to cool, while the labor market shows some signs of weakness. The central bank has indicated that it is prepared to cut rates for the first time in years.”

Credit union economists have also predicted the Fed is also all but certain to cut rates at its meetings next month.

Housing Market Recover Still a Ways Off

The Journal did note that a housing-market recovery is “still a ways off, even as lower mortgage rates and higher inventory have improved conditions for potential buyers.”

Pending home sales, a measure of transactions that have gone into contract but not yet closed, fell 5.5% in July from the month prior and fell 8.5% from July of last year, the National Association of Realtors said.