Inflation and purchasing power - NewsBreak

Inflation is the percentage change in the average price level. When there is inflation, dollars become less valuable. Here is why that matters: if the price level goes up but your income stays the same, your salary can't buy as much stuff, so your standard of living will decline. Fortunately, inflation rates typically run at about 3 percent in the U.S., which is pretty low by international standards. Even more fortunately, the inflation rate has been exceptionally low in recent years. From 2012 to 2020, it was always less than 3 percent; from 2013 to 2016 it was always less than 2 percent; and in 2015 it was only 0.1 percent. Given these historically low inflation rates, many people did not even notice the upward trend in average prices.