According to data released by the Treasury Department, inflation slowed significantly in June while paychecks grew at a faster rate. The news has offered new hope to Americans about the future of the economy.

The Consumer Price Index climbed 3% from January to June, less than the 4% increase in the year through May and a third of its 9% peak last summer. Declining gas prices are largely credited for the slow decrease.

President Joe Biden recently launched his new economic message he dubbed “Bidenomics,” which focuses on building the economy from “the middle out and bottom up.” The program is an effort to show voters that, if re-elected in 2024, Biden will prioritize the state of the economy. The president has touted the recent data as “Bidenomics in action.”

“Today’s report brings new and encouraging evidence that inflation is falling while our economy remains strong,” said Biden in a statement. “Our progress creating jobs while lowering costs for families is no accident, and I will continue to fight for lower costs for families every day.”

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Analysts say that the possibility of a recession has diminished. The administration, however, is proceeding with caution as they assess whether inflation reduction will continue.

Despite the good news, the Federal Reserve has suggested another likely raise in interest rates. In a speech on Wednesday, president of the Federal Reserve Bank of Richmond Thomas Barkin explained that “if you back off too soon, inflation comes back strong, which then requires the Fed to do even more.”

Some products and services also fell in cost in the month of June. Airfares dropped 8% from May, used cars and trucks were down 0.5% and the price of housing has sharply decreased, though not all of these changes are certain to last.

Inflation still remains above the 2% target rate of policymakers, a fact that Republicans have been quick to point out.

However, recent data has come as a pleasant surprise to consumers.

“The economy is defying predictions that inflation would not fall absent significant job destruction,” said Director of the National Economic Council Lael Brainard in a speech after the news was announced. “This economy is delivering strong results for America’s middle class.”

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