Economists are struggling to reconcile their upbeat views on the US economy with the angst of average Americans. The key measures of economic performance – growth, unemployment, and inflation – are almost perfect, putting the United States in an enviably strong position. But ahead of November’s presidential election, voters continue to cite the economy as a top issue. The main problem? Inflation.

How can this be? To the exasperation of most economists, all this handwringing seems terribly misplaced. The Covid-19 shock to US prices from the spring of 2021 to late 2023 has subsided dramat...