What is inflation?

{child_source}Wyoming Tribune Eagle{/child_source}

Inflation is the rate of increase in prices for goods and services over a given period of time within an economy. Inflation also shows increases in costs of living, decreases in purchasing power including the value of currencies.

In the U.S., the Consumer Price Index (CPI) and Producer Price Index (PPI) are two main gauges of inflation. They are calculated by the U.S. Bureau of Labor Statistics. The CPI looks at a basket of consumer goods and their retail prices. The PPI looks at inflation and price increases at the production and wholesale levels.