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What's happening with inflation?

Here’s a guide to understanding what’s happening with inflation and how to think about price gains when navigating this complicated moment in the U.S. and world economy. It can be helpful to think of the causes of today’s inflation as falling into three related buckets. Strong demand. Consumers are spending big.

What is inflation in economics?

What Is Inflation? Inflation is a gradual loss of purchasing power, reflected in a broad rise in prices for goods and services over time. The inflation rate is calculated as the average price increase of a basket of selected goods and services over one year.

Is inflation a national problem?

Between the start of 1991 and the end of 2019, year-over-year inflation averaged about 2.3% a month, and exceeded 5.0% only four times. Today, Americans rate inflation as the nation’s top problem, and President Joe Biden has said addressing the problem is his top domestic priority.

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