How did inflation affect the purchasing power of the dollar?

This can be calculated by dividing the CPI-U U.S. city average all items annual average index value for 2021 by the CPI-U U.S. city average all items annual average index value for 2022, as shown in table 1. This means that the purchasing power of the dollar declined about 7.4 percent between 2021 and 2022 because of inflation.

Should inflation be 2% or 2%?

As a general rule, countries attempt to keep inflation fixed at a rate of 2%. Moderate levels of inflation are acceptable. High levels of deflation can lead to economic stagnation. Retirees can be particularly aware of purchasing power loss since many of them live off of a fixed amount of money.

How to protect your finances against inflation?

There are a range of measures that individuals can take to protect their finances against inflation. For instance, one may choose to invest in asset classes that outperform the market during inflationary times. This might include commodities like grain, beef, oil, electricity, and natural gas.