All the data is pointing to a soft landing in the US economy, top economist says

• The US economy is not facing a recession, says Apollo chief economist Torsten Sløk.
• Sløk cites strong employment data, wage growth, and consumer spending as key indicators.

The US economy is cruising toward a soft landing with no recession on the table, according to Apollo chief economist Torsten Sløk.

In a note over the weekend, Sløk analyzed recent employment data and found no signs of an imminent recession and plenty of signs that point to a period of solid and sustainable economic growth.

"The bottom line is that the US economy is not in a recession, and there are no signs of a recession on the horizon," Sløk said.

Some of the encouraging data points for Sløk include the August employment report, which showed a decline in the unemployment rate to 4.2% from 4.3%, even though the 142,000 jobs added to the economy slightly missed economist estimates of 164,000.

"It is difficult to see strong signs of a slowdown in job creation," Sløk said.

Then there's wage growth, which continues to outpace the inflation rate and seems stuck at levels above the pre-pandemic trend of anemic growth. That's a good thing.

Wage growth accelerated to 3.8% in August, well above pre-pandemic levels of less than 3%.

And with US employment at record levels, with total nonfarm payrolls at 160 million, consumers are feeling confident about their spending habits.

That's important, as consumer spending is about 70% of the US economy.

"Daily data for debit card transactions shows that consumer spending has been accelerating in recent weeks," Sløk said. "Weekly data for retail sales went up last week and remains solid."

Finally, relatively speaking, few people in the economy seem to be losing their jobs or getting fired.

Initial jobless claims and continuing claims have both fallen in recent weeks, and bankruptcy filings have plunged since the start of the year.

To top it all off, corporate profits are at record highs and the Atlanta Fed's GDP model suggests third-quarter economic growth of 2.1%, which would follow the second-quarter's GDP growth rate of 3.0%.

That's not something you see right before a recession hits the economy, according to Sløk.

"This is a soft landing," Sløk said.