Below, EPI director of research Josh Bivens offers his insights on today’s release of the consumer price index (CPI) for June. Read the full Twitter thread here. 

There is even less reason this time to overreact to a hot inflation reading. We all know that the main drivers of today’s large number is commodity prices (mostly energy and food), and we also know that many of these prices have fallen sharply in recent weeks. 2

— Josh Bivens (@joshbivens_DC) July 13, 2022

It was a great jobs report. And everybody knew that the perception of the US economy it fostered was completely obsolete – by the time the report came out, COVID-19’s effects were hammering the economy. 4https://t.co/kvziXGGIeB

— Josh Bivens (@joshbivens_DC) July 13, 2022

But it does highlight that economic conditions are changing rapidly, and many of the data conventions that guide economic commentary and analysis are poorly-positioned to recognize this. 6 pic.twitter.com/804K8VZjnh

— Josh Bivens (@joshbivens_DC) July 13, 2022

A similar story applies to what was once widely-agreed as the most important inflation gauge for the Fed – the core price index for personal consumption expenditures. It also has shown deceleration in more-recent months. 8https://t.co/w4ov8AcwwU

— Josh Bivens (@joshbivens_DC) July 13, 2022

They have time to wait and see if recent signs of deceleration come to fruition. The risk of damaging the strong and welcome recovery from the pandemic recession is very high and many drivers of inflation may already be slowing. 10

— Josh Bivens (@joshbivens_DC) July 13, 2022