Inflation Is Finally Cooling Down
The annual inflation rate in the United States eased to 2.7% for the 12 months ending November, down from 3.0% previously reported for September, signaling a meaningful shift after years of financial strain. This decline marks a turning point for households that have been wrestling with higher costs on everything from groceries to gas. While prices aren’t exactly dropping back to pre-pandemic levels, the pace at which they’re climbing has slowed considerably.
Global inflation is forecast to decline steadily, from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies, according to the International Monetary Fund. The relief is palpable, especially for people who’ve been delaying major purchases or cutting back on everyday luxuries. After months of sticker shock at checkout lines, consumers are beginning to see some breathing room in their budgets.
It’s hard to say for sure how quickly things will normalize completely, but the trend is undeniable. Central banks have spent the past two years aggressively hiking interest rates to cool demand, and those efforts are finally bearing fruit. You can feel it in conversations at coffee shops and grocery stores: people are less anxious about prices than they were even six months ago.
Job Market Shows Resilience Despite Concerns
The unemployment rate remained below 4% from February 2022 through April 2024, reflecting a robust labor market recovery from the pandemic-era downturn. However, in May 2024, it rose to 4.0%, currently sitting at approximately 4.2%. That uptick caused some alarm bells to ring, yet the bigger picture shows a labor market that’s stabilizing rather than collapsing. We generated 2.2 million jobs in 2024, the slowest pace since 2020, but still above 1.99 million in 2019, demonstrating that employment growth continues at a healthy, sustainable rate.
Let’s be real: the job market isn’t perfect. Hiring activity has slowed somewhat, and it’s taking job seekers longer to land positions than it did during the red-hot recovery phase. In 2024, job growth continued to cool off, settling back into a familiar gait that was roughly in line with the pace of job creation in 2010-2019. This normalization might feel uncomfortable if you’ve grown accustomed to multiple offers and bidding wars for talent, but it actually suggests the economy is finding its footing.
On the wage front, the average hourly wages have increased by 4% over the past year, meaning workers are seeing their paychecks grow faster than inflation for the first time in a while. That’s a genuine win. The fears of mass layoffs that dominated headlines in early 2024 never fully materialized, and businesses continue hiring even if they’re being more selective about it.
Consumer Confidence Is Rebounding
Here’s the thing: people are starting to feel better about where things are headed. The Conference Board Consumer Confidence Index increased in November to 111.7, up 3.0 points from 108.7 in October. That might not sound like a massive leap, but after months of doom scrolling through economic news, any upward movement feels significant. Consumers aren’t just passively observing the economy anymore; they’re cautiously optimistic about their own financial futures.
What’s particularly striking is that this improved sentiment isn’t limited to the wealthy. Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years. November’s increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market. When ordinary people feel better about job security and their ability to pay bills, that’s when you know the hard times might genuinely be easing.
Average 12-month inflation expectations stood at 4.9% in November. People aren’t just feeling better; they’re also expecting prices to stabilize, which is crucial for planning major expenses like vacations, home renovations, or replacing that aging car. This psychological shift matters more than most economists admit.
Economic Growth Remains Steady
Global economic growth in 2025 looks set to roughly match the 2024 level. Growth in the US is expected to dip slightly and remain solid at roughly 2.5%, also thanks to higher productivity momentum than in Europe. That’s not spectacular, but it’s stable, and stability is exactly what we need right now after years of whiplash. The economy is avoiding the recession that so many experts predicted would arrive in 2024.
The global economy has proved resilient, inflation has declined within sight of central bank targets, and risks to the outlook are becoming more balanced. The Economic Outlook projects steady global GDP growth of 3.1% in 2024, the same as the 3.1% in 2023, followed by a slight pick-up to 3.2% in 2025. This consistency is actually reassuring. After the violent economic swings of the pandemic and its aftermath, a period of predictable, moderate growth allows businesses to plan investments and households to make decisions without constant fear.
Honestly, growth doesn’t need to be explosive to be good. What matters is that paychecks keep coming, businesses stay open, and opportunities remain available. The economy is finding its rhythm again, moving away from crisis mode into something that feels more sustainable. It’s the kind of progress that might not make flashy headlines but makes everyday life significantly easier for millions of people.
