Odd Lots Neil Dutta and Conor Sen on the Chances of a US Soft Landing
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Jan 12, 2023 
Neil Dutta, chief economist at Renaissance Macro Research, and Conor Sen, Bloomberg Opinion columnist, dissect the current state of the US economy. They discuss the surprising resilience in job growth and low unemployment, while addressing the potential for a soft landing amid cooling wages and inflation. The duo explores the implications of recent rental market trends, consumer behavior, and China's economic recovery on the overall landscape. Their insights into the Federal Reserve's challenges and the complex interplay of market dynamics make for a compelling conversation.
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Soft Landing Indicators
- The recent jobs report supports the soft landing thesis, with decreasing unemployment and easing wages.
- However, truly disproving a soft landing requires a significant rise in unemployment.
Conflicting Economic Signals
- The latest jobs report favors a soft landing, with wage growth slowing and nominal growth around 4%.
- However, low unemployment at 3.5% still pressures capacity and inflation.
Short-Term Economic Focus
- Focus on short-term economic trends (3-6 months) rather than abstract inflation/recession debates.
- Current positive trends include good real growth, rapidly decreasing inflation (goods, gas, rent).