reade pickert wrote about this today. at what point do we see that buildup of inflationary pressures start to cool for the american consumer? reade: what we see when we talk about inflation, when economists talk about inflation they talk about this year-over-year number and we have seen this occasionally bumpy pullback in inflation over the last year or so. but when you talk to americans about inflation they talk about our price levels. so this story was a way of showing how much price levels have changed since january 2020 before the pandemic, to really get the sense of this cost-of-living squeeze. when you think about where the consumer is right now you have seen wages increase a lot over that same time. on a nominal basis wages increased something around 20% since january 2020, which is a lot and historic. but the problem is inflation has eat not a lot of those gains. so when you think about where consumers are right now, they have had this wage growth that has allowed them to really keep the consumer spending resilient

reade pickert joins us from washington, d.c. what drove the drop in producer prices? s important to remember these numbers came on the heels of a better-than-expected cpi. what we saw was that producer prices were driven mainly down by sharp decline in gasoline prices, which helped pull down the headline by as much as it did. you also saw some other things that were pretty inspiring. for instance, we saw the services measure was flat for the month after months and months of increasing, which is the type of thing the federal reserve is concerned about. it really likes to see that. one of the main things that we care about from this particular report is a lot of the inputs paired with the stuff from the cpi yesterday flows into the fed's preferred inflation measure, which is that pce price index. right now, it is looking like that number is going to comment in pretty modest. amber: i guess that helps explain why we are seeing the market increasingly bet that the fed is done. reade: yes. the producer price data adds to the distal inflationary picture. retail sales data wa

jonathan: this is from reade pickert at bloomberg.res $119 and $.27 to buy the same goods and services a family can afford with $100 before the pandemic. if i can pick any one number that matters right now to how the consumer feels in america that number right there. tom: economist of the year lael brainard silent to the white house. she gives credit to the idea of cumulative. it's not year-over-year. it's not month over month it's a cumulative study. the latest number i saw from the beginning of the pandemic up 17 or 18%. jonathan: that's the number that matters. no two ways about it. do you think we need to talk how we talk about inflation in this country on programs like this when you sit here saying month over month it is this, inflation is slowing. . what on earth are you talking about. >> we have always talked to both audiences. our answer is we have to have a responsibility to do both. as you say claims coming out extremely important. the adjustment second-quarter gdp. 5%, an uptick is the model right now. then we have to look