In the 2000 action-comedy Miss Congenialty, when pageant host William Shatner asks the Miss Rhode Island character to describe her “idea of a perfect date,” she responds: “April 25th, because it’s not too hot, not too cold. All you need is a light jacket!”

For the stock market, perhaps the “perfect date” is April 12. The long-awaited U.S. consumer price index (CPI) numbers came in Wednesday, and they were not too hot, not too cold.

Both the economy and inflation are cooling, but not to such an extent that fears of a deep recession are warranted. That’s good news for the stock market.

The U.S. Bureau of Labor Statistics reported Wednesday that the CPI significantly cooled in March. In response to the positive data, U.S. stocks opened higher in a relief rally. Stocks had been treading water Monday and Tuesday, waiting for the CPI reading.

However, the rally didn’t last. The main U.S. stock market indices closed lower on Wednesday as follows:

• DJIA: -0.11%
• S&P 500: -0.41%
• NASDAQ: -0.85%
• Russell 2000 -0.72%

Stocks erased earlier post-CPI gains in volatile trading, as investors bounced between optimism and pessimism over the economy. Fears of a recession won the day.

The inflation beast is tamer…

The CPI rose 5% in the year through March, down from 6% in February and representing a two-year low. The drop was largely driven by declines in food and gasoline costs. On a monthly basis, the CPI edged up only 0.1% (versus the estimate of 0.2%) following a 0.4% increase in February.

However, the “core” CPI, which excludes volatile food and energy components, increased 0.4% from February following a 0.5% rise in the previous month. That pushed up the annual increase in core prices from 5.5% to 5.6%, in line with estimates.

Core CPI inflation remains a bit sticky. However, overall, goods inflation is easing, as pandemic-induced supply chain woes get solved and commodity prices fall.

Analysts greeted the April 12 news on inflation with enthusiasm, as reflected by the following tweet:

Let’s look at the global economic context.

The International Monetary Fund published its latest World Economic Outlook on April 11, revising its January projection slightly downward.

Global growth is now expected to fall from 3.4% in 2022 to 2.8% this year before rebounding to 3.0% in 2024. The 2023 growth projection is down from a January estimate of 2.9% (see chart).

Global economic growth isn’t vigorous, but neither is it falling off a cliff. This balance should buoy equity markets.

Bond yields continued their downward trend on Wednesday, though, as traders showed lingering fears about the health of the banking sector. We’re getting clear signals from the bond market that we’re not out of the woods with the economy.

Trading in the equity markets has been choppy this week, as investors digest the conflicting mix of good and bad news. JPMorgan Chase (NYSE: JPM) CEO Jamie Dimon last week warned that we’re still seeing “threatening clouds” over the economy, citing as major culprits tougher credit conditions, rising rates, and continuing fallout from the banking crisis.

The decline of bond yields also points to the economy losing momentum. Investors favor Treasury bonds when they fear a recession because they’re considered to be safe havens. Bond yields move in the opposite direction of their prices.

However, the jobs market remains reassuring. Last Friday, the U.S. Bureau of Labor Statistics reported that the economy had added 236,000 jobs in March. That’s a large decline from previous months, but still a solid boost to the jobs market.

The addition of 236,000 jobs in March was considerably lower than the figures in February, when 310,000 jobs were added to the economy, and in January, when 517,000 jobs were added.

Not since 1969…

The U.S. unemployment rate in March also declined slightly to 3.5%, the lowest rate in 54 years…or as The Eagles might have put it: ‘We haven’t had that spirit here since 1969.”

Despite widely publicized layoffs in such sectors as technology, the U.S. labor market generally remains strong. Jobs growth has cooled from its previously torrid pace, but not enough to signal an imminent recession.

WATCH THIS VIDEO: Stocks End Q1 on a High Note…Can it Last?

In its Job Openings and Labor Turnover Summary (JOLTS) report released April 4, the Labor Department revealed that job listings in March as a whole have declined, but they continue to outnumber unemployed workers.

There were 9.9 million job openings in February, versus 10.6 million in January. Notably, there are still 1.7 jobs available per unemployed worker.

Meanwhile, in tandem with this data, unemployment insurance claims have risen in recent weeks, although within the parameters of a stable economy.

For job seekers in a wide variety of fields, there’s still robust expansion in the number of available opportunities.

Workers also are in a strong position to demand better wages. But employment’s previously torrid growth is slowing, which helps the Federal Reserve in its fight against inflation.

As it relates to both the economy and inflation, Goldilocks is back in town…and that’s manna for stocks.

Editor’s Note: Are you hunting for high yields, but you also want to mitigate risks? Consider my colleague Nathan Slaughter, chief investment strategist of High-Yield Investing.

As a high-yield expert, Nathan has devised a simple strategy that could help you generate a steady stream of cash, almost like clockwork. Click here for details.

John Persinos is the editorial director of Investing Daily.

To subscribe to John’s video channel, click this icon:

This article originally appeared on Investing Daily.