The economy,
in human terms.
Prices and paychecks, from the supermarket to the rent.
A base period sets an index to 100 so later levels can show relative price movement. Percent changes, calculated against the earlier index level, make comparisons meaningful across items and time.
Disinflation is a slowdown in the rate of price increases, not a return to earlier prices. A hypothetical grocery item shows how inflation, disinflation and deflation differ, while September’s CPI illustrates how a national average can move differently from individual bills.
Inflation is the percentage change in a price index over a stated period. The CPI tracks a weighted consumer basket, so monthly and annual rates answer different questions, and neither necessarily matches a household’s own experience.
Inflation indexes track average changes in prices for consumer goods and services, including groceries and rent. They leave out investments and cannot represent any one household’s spending pattern.
