In the latest weekly+, I suggested that, for the first time this cycle, the incoming macro data uniformly points to a decelerating US economy.

I don’t say that lightly, nor is it lost on me that in virtually any other context, a nonfarm payrolls report featuring a 236,000 headline print, a 3.5% unemployment rate and 4.2% YoY wage growth would count as a very robust read on the labor market.

And yet, between the ISM misses, the ADP shortfall (versus consensus) and particularly the downside JOLTS print, describing the latest run of top-tier data as “uniformly soft” isn’t a stretch at all. ISM manufacturing was plain old weak, for example. And in context, the labor market data was amenable to a soft landing spin.

Sure enough, Goldman’s David Mericle said in a new note that we now have “encouraging news about the prospects for achieving the gentle rebalancing of the labor market needed for a soft landing.”

Perhaps the most notable section of Goldman’s assessment found Mericle suggesting that the “immaculate” outcome some well-known economists were adamantly skeptical about last year appears to be materializing. Job openings have declined quite a bit (it goes without saying they’re still extraordinarily elevated) and at the same time, employment has increased a lot, while the unemployment rate has moved lower.

“This is a dramatic departure from the usual historical pattern, in which the unemployment rate tends to rise more than the job openings rate falls,” Mericle remarked, adding that “many economists initially thought” such an outcome “was impossible.”

The figure above underscores the point. The current conjuncture has no historical precedent.

As for whether this miracle is sustainable, Goldman says it may be, or at least for a few months. “While jobless claims and our real-time estimate of the layoff rate have increased moderately in recent months, both are still at fairly low levels, and the share of unemployed workers who find new jobs each month is still high, suggesting that the recent pattern can persist for the time being,” the bank said.

Revisions to the jobless claims series unveiled on Thursday showed claims are higher than previously thought, and job cuts are running at a very elevated pace in 2023.

Notably, Goldman says the participation rate has now recovered the pre-pandemic demographic trend, while immigration “has also rebounded quickly enough over the last year and a half to reverse a shortfall in the earlier part of the pandemic.”

I suppose I was wrong recently to cast doubt on the idea that the participation rate would make it back to trend. As noted here Friday, I was also too pessimistic on the prospects for leisure and hospitality to recover all the jobs lost to COVID. The sector is now just 2.2% short of pre-pandemic employment levels.

This is, of course, still a work in progress for the Fed. There’s no guarantee that the bottom isn’t going to fall out one fine NFP Friday morning, and there are reasons to believe we’re being lulled to sleep when it comes to subdued weekly jobless claims.

For now, though, things look tentatively favorable, notwithstanding the usual book-length list of caveats and footnotes to account for myriad uncertainties and the very real possibility that the combination of drag from the bank drama and the lagged impact of legacy tightening+, could manifest in a “sudden stop” or “Wile E. Coyote” moment later this year.

As for jobs, Goldman’s Mericle offered a nuanced take. “The labor market increasingly appears to be headed toward a somewhat more intense version of its pre-pandemic state, when it was quite tight by historical standards but nonetheless did not generate problematic wage pressures,” he wrote.