Another Soft Patch

The economy has experienced neither a hard landing nor a soft landing since the Fed started tightening monetary policy in March 2022. It has experienced a few rolling recessions in industries like housing and retailing, which spurred soft patches in overall economic growth. The economy may be going through another soft patch, as evidenced by the Citigroup Economic Surprise Index, which has been modestly negative since May 3 (chart).

After today's soft batch of economic indicators, the Atlanta Fed’s GDPNow tracking model revised Q2’s real GDP estimate down from 3.0% (saar) to 2.7%. That's still relatively strong. Neither the bond nor stock market reacted much to today's numbers.