The fact that the U.S. economy stuck a soft landing this year rather than slipping into recession is making economists pretty upbeat about what comes next.

“Taken all together, I’d say the job market’s still in a very good place, even though it has cooled off,” said Mark Zandi at Moody’s Analytics.

This year, an average of 186,000 more people were added to payrolls per month versus an average of 240,000 more a month in 2023. Unemployment is still low but is 0.5% higher than a year ago. 

Zandi points out that that’s exactly what the Fed wanted: to cool inflation while keeping employment steady. Now, he said, we’re in a sweet spot. Job creation is strong and unemployment is low.

Plus, “Wage growth is currently about 4%, consistent with 2% inflation and 2% productivity growth,” he said. “If we can stay around 4%, I think that would be perfect.”

Wage growth needs to stay that high, per Navy Federal Credit Union economist Robert Frick.

“The price of certain necessities — food, transportation and housing — keep going up. The increase of wages above the rate of inflation is the only thing that is really helping lower-income people right now,” he said.

There’s one major wild card for 2025, noted Mark Zandi: president-Elect Trump’s immigration plans.

“That could cause labor markets to tighten, particularly in industries obviously where immigrants are more prevalent — agriculture, construction, leisure-hospitality, child care, elder care,” he said.

And such labor shortages, Zandi said, could spark up inflation again.