A lot of signs, including Wednesday’s consumer price index, are pointing to the idea that inflation is easing. It was 3% year over year in June. That’s partly because some of the sectors that have seen the most overheated price jumps have cooled down.

It’s been a long time since we’ve heard the phrase “transitory inflation.” Federal Reserve Chair Jerome Powell decided the label wasn’t so accurate in late 2021. But Moody’s Analytics economist Mark Zandi thinks the T-word is still the right way to describe this period.

“Certainly didn’t feel that way because it’s taken a long time to work through those effects because those shocks were so massive and they were global,” Zandi said.

He was talking about the pandemic supply chain snarls, which affected the cost of goods, and the initial impact of the war in Ukraine, which affected the cost of energy and food. These played an outsize role in inflation but have largely subsided.

“We’re probably two-thirds of the way there. And that last third is going to take a bit of time, I think,” Zandi said.

Part of what’s left in that last third includes the transitory category that’s come to define this time: used cars.

Omair Sharif is president of Inflation Insights. “It has had such a dramatic impact on these month-to-month readings, but we are finally starting to see a bit more caution in that particular market,” Sharif said.

Supply is starting to catch up to demand. Another area where this is happening is domestic airfare.

What economists worry more about is persistent underlying inflation. Sharif said that even one of its biggest contributors, housing, is starting to look better.

“We know already what’s happening to new-lease rent growth, which is at close to zero or declining in most parts of the country,” he said.

It takes about a year for that to show up in the consumer price index. 

Now this is the part of the story where I contradict all the happy things I just said. First, economists expect health care costs, traditionally a big piece of underlying inflation, to rise. Secondly, this last leg of inflation is the hardest to tame. And third: Economist Carola Binder at Haverford College said that in regard to those temporary shocks we’re just getting over, “there can and will always be more.”

If the last few years have taught us anything, it’s that surprises are a big part of the economy.