First half U.S. gross domestic product was a hair over 2%. Inflation expectations are nearly back to 2%. Job growth over last year? You guessed it.

First half U.S. gross domestic product was a hair over 2%. Inflation expectations are nearly back to 2%. Job growth over last year? You guessed it.

Why it matters: It may not last, but right now, it looks like we're moving back toward the slow growth environment that preceded the COVID-19 crisis, something we used to call the "2% world."

Driving the news: A flurry of decent economic data last week — all of which seemed to point toward slowing inflation and growth.

The cherry on top was Friday's jobs report for August, which showed the employment picture developing in a way that is perfectly in line with the best-case scenario for the economy after last year's rate hike surge.

Employment continued to expand, but the pace of that growth was markedly slower: Annual job growth was just 2% — it averaged more than 4% in 2022. That should continue to help ease inflation.

The big picture: This is another way of saying the Federal Reserve seems very close to pulling off the so-called soft landing of the economy that so many have hoped for.

Between the lines: This would be a great outcome for the stock market, which has gotten a lift lately from the idea that the Fed might not have to hike interest rates anymore. (They crushed the market in 2022.)

What's more, if the Fed can stop easing without a full-on recession, that should help support corporate profits and give the market another reason to rise.

Yes, but: Not everything is turning up 2%.

For instance — long-term U.S. government bond yields, also known as interest rates — continue to hover above 4%, higher than the 2%-Ish level where they sat for most of the decade before COVID hit.

But, but, but: Market-based readings of inflation expectations continue to come back to earth after flaring up during the post-COVID breakout of price pressures.

It's one of the clearest indications that some of the world's most sophisticated investors — these inflation expectations are based on bond market prices — expect a return of the low inflation environment that characterized the pre-COVID before times.

The bottom line: Bond yields basically reflect expectations about growth and inflation — and growth is already at 2%.

That suggests the markets think it will take some time for the Fed to slowly guide inflation back to its target. Which, of course, is 2%.