The Inflation Story Has Changed Dramatically. Paul Krugman Breaks It Down.
In recent months, the story of the U.S. economy has changed significantly. The January Consumer Price Index showed that annual inflation slowed for the seventh straight month. That month, the economy also added over half a million jobs, and unemployment reached 3.4 percent, its lowest level since 1969. In light of these trends, comparisons to the 1970s stagflation crisis have weakened, and the possibility of a \u201csoft landing\u201d looks increasingly likely.\n\nBut that doesn\u2019t mean we\u2019ve achieved victory. While the headline inflation numbers have looked promising, the devil is in the details. Answers to questions like how fast inflation has actually slowed, whether that slowdown will continue, how likely a future recession is, and how the Fed should act all next come down to which statistics and indicators you are looking at.\n\nSo I decided to bring on the Times Opinion columnist and Nobel laureate economist Paul Krugman to break down the data and what it says about inflation moving forward. We also discuss the debt ceiling crisis, why the Republican Party has failed to embrace a coherent economic agenda, whether the Biden administration\u2019s industrial policy efforts could undermine its climate objectives, the 20th-century economics book that best explains why the United States has gotten so bad at building things, why Krugman \u2014 a longtime advocate of free trade \u2014 has come around to embrace greater protectionism, why he believes China\u2019s economic ascendence is no longer inevitable, whether A.I. will replace huge numbers of white collar workers and more.\n\nMentioned:\n\n\u201cRecession, Inflation or Soft Landing in 2023?\u201dby Free Expression\n\n\u201cWe\u2019re Going to Miss Greed and Cynicism\u201d by Paul Krugman\n\nThe Rise and Decline of Nations by Mancur Olson\n\nBook Recommendations:\n\nSlouching Towards Utopia by J. Bradford DeLong\n\nHow the War Was Won by Phillips Payson O\u2019Brien\n\nNinth House by Leigh Bardugo\n\nThoughts? Guest suggestions? Email us at ezrakleinshow@nytimes.com.\n\nYou can find transcripts (posted midday) and more episodes of \u201cThe Ezra Klein Show\u201d at nytimes.com/ezra-klein-podcast, and you can find Ezra on Twitter @ezraklein. Book recommendations from all our guests are listed at https://www.nytimes.com/article/ezra-klein-show-book-recs.\n\n\u201cThe Ezra Klein Show\u201d is produced by Emefa Agawu, Annie Galvin, Jeff Geld, Rog\xe9 Karma and Kristin Lin. Fact-checking by Michelle Harris, Rollin Hu, Mary Marge Locker and Kate Sinclair. Mixing by Sonia Herrero. Original music by Isaac Jones. Audience strategy by Shannon Busta. The executive producer of New York Times Opinion Audio is Annie-Rose Strasser. Special thanks to Pat McCusker and Kristina Samulewski.