Summary
- Inflation measures how prices change over time.
- It reduces buying power if savings grow more slowly.
- Official figures come from government statistics.
Section 1.0
Definition
Inflation is a general increase in prices across the economy, usually measured as a yearly percentage.
Section 2.0
Buying power
If prices rise 3 percent in a year, something that cost 100 would cost about 103. Money that did not grow buys a little less.
Section 3.0
Where the numbers come from
In the United States, the Bureau of Labor Statistics publishes the Consumer Price Index, a common measure of inflation.
Section 4.0
Questions to think about
- How have my regular costs changed this year?
- How does this affect my budget?
- Where can I read the official figures?
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