The Inflation Story Has Changed Significantly. 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 “soft landing” looks increasingly likely.

But that doesn’t mean we’ve 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.

[You can listen to this episode of “The Ezra Klein Show” on Apple, Spotify, Amazon Music, Google or wherever you get your podcasts.]

So 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’s industrial policy efforts couldundermine its climate objectives, the 20th-century economics book that best explains why the United States has gotten so bad at building things, why Krugman — a longtime advocate of free trade — has come around to embrace greater protectionism, why he believes China’s economic ascendence is no longer inevitable, whether A.I. will replace huge numbers of white collar workers and more.

You can listen to our whole conversation by following “The Ezra Klein Show” on Apple, Spotify, Google or wherever you get your podcasts. View a list of book recommendations from our guests here.

(A full transcript of the episode will be available midday on the Times website.)

“The Ezra Klein Show” is produced by Emefa Agawu, Annie Galvin, Jeff Geld, Rogé 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.