Good News on Inflation — With a Very Big Asterisk

The latest CPI report came in better than expected: headline inflation slowed to 3.5% and experienced its largest one-month decline since April 2020. But better-than-expected does not mean problem solved. Falling energy prices were largely responsible for this positive news, and a renewed war with Iran could quickly reverse that progress. As oil prices rise once more, those costs can spread quickly from the gas pump to airfare, shipping, groceries and beyond. In this episode, Justin also investigates what our current rate of inflation (still historically high) means for your paycheck. Wages may be rising, but higher prices can wipe out those gains. That helps explain why many Americans feel like they’re working just as hard without getting ahead. And while today’s numbers have reduced pressure on the Fed for aggressive interest rate hikes, tariffs, geopolitical shocks, and inflation expectations are still in play, making the road back to price stability far from smooth. Contents 00:00 The top-line numbers 00:59 Justin’s immediate reaction 02:16 What matters most for the average America 04:19 How these numbers stack up to historical data 05:32 How US inflation compares to peer countries 07:19 What’s happening to real wages 09:20 How this report may influence the Fed 10:32 How the ceasefire collapse will affect next month’s data 12:26 What Justin is keeping his eye on Subscribe on YouTube    / platypuseconomics   Subscribe on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers