Good news is unhealthy news: It had been the mantra in financial circles ever since inflation took off in early 2021. A powerful job market and fast shopper spending risked fueling additional worth will increase and evoking a extra aggressive response from the Federal Reserve. So each optimistic report was extensively interpreted as a unfavourable improvement.

But immediately, good news is beginning to really feel good once more.

Inflation has lastly begun to reasonable in earnest, at the same time as financial progress has remained optimistic and the labor market has continued to chug alongside. But as a substitute of decoding that strong momentum as an indication that situations are too scorching, prime economists are more and more seeing it as proof that America’s economic system is resilient. It is able to making it by means of quickly altering situations and better Fed rates of interest, permitting inflation to chill progressively with out inflicting widespread job losses.

A comfortable financial touchdown just isn’t assured. The economic system might nonetheless be in for an enormous slowdown as the complete affect of the Fed’s greater borrowing prices is felt. But current knowledge have been encouraging, suggesting that buyers stay able to spend and employers prepared to rent similtaneously worth will increase for used vehicles, gasoline, groceries and a spread of different services and products gradual or cease altogether — a recipe for a mild cool-down.

“If you go back six months, we were in the ‘good news is bad news’ kind of camp because it didn’t look like inflation was going to come down,” mentioned Jay Bryson, chief economist at Wells Fargo. Now, he mentioned, inflation is cooling sooner than some economists anticipated — and good news is more and more, properly, optimistic.

Markets appear to agree. Stocks climbed on Friday, as an example, when a spate of sturdy financial knowledge confirmed that buyers continued to spend as wages and worth will increase moderated — suggesting that the economic system retains power regardless of cooling across the edges. Even the Fed chair, Jerome H. Powell, has instructed that proof of shopper resilience is welcome so long as it doesn’t get out of hand.

“The overall resilience of the economy, the fact that we’ve been able to achieve disinflation so far without any meaningful negative impact on the labor market, the strength of the economy overall, that’s a good thing,” Mr. Powell mentioned throughout a news convention final week. But he mentioned the Fed was intently watching to ensure that stronger progress didn’t result in greater inflation, which “would require an appropriate response for monetary policy.”

Mr. Powell’s feedback underline the elemental stress within the economic system proper now. Signs of an economic system that’s rising modestly are welcome. Signs of rip-roaring progress usually are not.

In different phrases, economists and buyers are not rooting for unhealthy news, however they aren’t exactly rooting for good news both. What they’re actually rooting for is normalization, for indicators that the economic system is transferring previous pandemic disruptions and returning to one thing that appears extra just like the prepandemic economic system, when the labor market was sturdy and inflation was low.

As the economic system reopened from its pandemic shutdown, demand — for items and companies, and for staff — outstripped provide by a lot that even many progressive economists have been hoping for a slowdown. Job openings shot up, with too few unemployed staff to fill them.

But now the economic system is coming into higher steadiness, though progress hasn’t floor to a standstill.

“There’s a difference between things decelerating and normalizing versus actually crashing,” mentioned Mike Konczal, director of macroeconomic evaluation on the Roosevelt Institute, a liberal analysis group. “You could cheer for a normalization coming out of these crazy past couple years without going the next step and cheering for a crash.”

That is why many economists appear to be completely happy as employers proceed to rent, shoppers splurge on Taylor Swift and Beyoncé live performance tickets, and vacationers pay for costly overseas trips — resilience just isn’t universally seen as inflationary.

Still, Kristin Forbes, an economist on the Massachusetts Institute of Technology, mentioned it was too easy to argue that each one indicators of power have been welcome. “It depends on what the good news is,” she mentioned.

For occasion, sustained fast wage progress would nonetheless be an issue, as a result of it might make it laborious for the Fed to decrease inflation fully. That’s as a result of corporations which might be nonetheless paying extra are prone to attempt to cost prospects extra to cowl their rising labor payments.

And if shopper demand springs again strongly and in a sustained method, that might additionally make it laborious for the Fed to totally stamp out inflation. While worth will increase have moderated notably, they continue to be greater than twice the central financial institution’s goal progress price after stripping out meals and gasoline costs, which bounce round for causes which have little to do with financial coverage.

“We are closer to normal now,” mentioned Michael Strain, director of financial coverage research on the American Enterprise Institute. “It makes it seem like good news is good news again — and that’s certainly how investors feel. But the more that good news becomes good news, the higher the likelihood of a recession.”

Mr. Strain defined that if shares and different markets responded positively to indicators of financial power, these extra growth-stoking monetary situations might maintain costs rising. That might prod the Fed to react extra aggressively by elevating charges greater down the highway. And the upper borrowing prices go, the larger the prospect that the economic system stalls out sharply as a substitute of settling gently right into a slower progress path.

Jan Hatzius, the chief economist at Goldman Sachs, thinks the United States will pull off a comfortable touchdown — maybe one so comfortable that the Fed would possibly be capable of decrease inflation over time with out unemployment having to rise.

But he additionally thinks that progress wants to stay beneath its typical price, and that wage progress should gradual from properly above 4 p.c to one thing extra like 3.5 p.c to ensure that inflation totally fades.

“The room for above-trend growth is quite limited,” Mr. Hatzius mentioned, explaining that if progress does are available sturdy he might see a situation through which the Fed would possibly raise rates of interest additional. Officials raised charges to a spread of 5.25 to five.5 p.c at their assembly final month, and buyers are watching to see whether or not they are going to comply with by means of on the one last price transfer that that they had earlier forecast for 2023.

Mr. Hatzius mentioned he and his colleagues weren’t anticipating any additional price strikes this yr, “but it wouldn’t take that much to put November back on the table.”

One purpose economists have turn into extra optimistic in current months is that they see indicators that the provision facet of the supply-demand equation has improved. Supply chains have returned largely to regular. Business funding, particularly manufacturing unit development, has boomed. The labor force is growing, due to each elevated immigration and the return of staff who have been sidelined throughout the pandemic.

Increased provide — of staff and the products and companies they produce — is useful as a result of it means the economic system can come again into steadiness with out the Fed having to do as a lot to scale back demand. If there are extra staff, corporations can maintain hiring with out elevating wages. If extra vehicles can be found, sellers can promote extra with out elevating costs. The economic system can develop sooner with out inflicting inflation.

And that, by any definition, could be good news.