The U.S. economy’s big problem? People forgot what ‘normal’ looks like.

It has been a miracle year for the U.S. economy. Inflation has plummeted without triggering a recession. Many experts said that could not happen without widespread layoffs and a downturn. The economy has gained 2.4 million jobs so far this year, and growth has accelerated, with an annualized rate topping 5 percent in the third quarter. The good news has also fueled a stock market rally. In polls, people are downbeat about this economy, but their actions don’t match their words. There has been a consumption boom this year. Americans continued to spend heavily on apparel, concerts and vacations. In many ways, this is the year the economy finally returned to something close to normal. But many people seem to have forgotten what normal looks like after a traumatic few years.

It seems inevitable that growth will slow from here. Many American consumers have been spending more than they earn lately, enabled by all the extra savings people built up during the covid-19 pandemic (and an alarming rise in credit card balances). At some point, consumers have to scale back. Americans have also been buoyed by unprecedented growth in their wealth in recent years, largely because of surging home and stock market prices. It wasn’t just the rich getting richer. Net worth rose for Americans of all income levels, ages and races from 2019 to 2022, according to Federal Reserve data. Still, there are signs consumers are getting choosier. As retailer Nordstrom warned in its recent earnings call, “We continue to see a cautious consumer.” It’s still possible the United States will see a “soft landing” that avoids a painful recession, but growth is likely to be lackluster in 2024 as consumption cools.

The job market is the key indicator to watch. It has been easy to find a job in recent years. That, too, has helped boost consumption. But hiring is slowing down. Companies are getting more selective. Workers are no longer quitting en masse, and people are staying unemployed longer, a sign that it’s getting harder to find a new job after a layoff. The current unemployment rate of 3.9 percent is very low, but even a modest rise in that rate could spook Americans.

Federal Reserve officials are almost certainly done hiking interest rates. They need to recognize that the labor market is back in balance. Job openings still appear high, but companies are being very picky. The hiring rate has fallen sharply this year. Meanwhile, inflation is getting close to the Fed’s 2 percent target. Data released Thursday shows the Fed’s preferred inflation metric has fallen to a 2.5 percent annualized rate in the past six months. The recent years’ inflation spike was driven a lot more by supply problems than many realized — or admitted. It appears that spike was transitory. It just took longer than many expected to work out the supply chain chaos and hire back enough workers. With gas prices back down and rent and food price increases moderating, the Fed looks likely to meet its inflation goal in 2024.

The debate now is when the Fed will start cutting interest rates. Stocks have been rallying in recent weeks as investors are betting a cut will come by May. That would certainly help the housing market, which has frozen with mortgage rates at the highest levels in about two decades. The Fed has to see how the data comes in this winter, but it would make sense to bring rates back to a lower level now that many pandemic problems are over. That doesn’t mean a return to near-zero. But, as New York Fed President John Williams said Thursday, rates are “the most restrictive in 25 years.” The Fed cannot declare the inflation fight won prematurely, but current rates might soon seem excessive.

As for President Biden and Congress, they can help by finally agreeing on a budget for this fiscal year and, even better, launching a bipartisan debt commission to begin tackling the nation’s dire long-term fiscal challenges.

So who gets credit for the economic miracle? It’s clear the Fed restored trust in its judgment and, in turn, that inflation would come down. Mr. Biden’s $1.9 trillion stimulus also played a role by beefing up people’s savings. That is still fueling stronger-than-expected consumption. Mr. Biden’s aid also drove a lot of hiring this year in state and local governments.

But the biggest factor is a return to normal — companies untangling supply chains even as people returned to stores. The United States has a chance to stick its soft landing. It would be even better — for the country’s economy and its politics — if Americans believed it could happen.