Definition

Noun: * The rate of change of prices (as indicated by a price index) calculated on a monthly or annual basis: A key economic indicator that measures the percentage increase in the general price level of goods and services in an economy over a specific period, typically a year. It shows how quickly the purchasing power of money is eroding.

Usage

The term "inflation rate" is used to discuss economic conditions, monetary policy, and financial planning. It is often reported by government statistical agencies (e.g., the Bureau of Labor Statistics in the US reports the Consumer Price Index, or CPI, which is used to calculate the inflation rate).

Examples

• The central bank raised interest rates to combat the high inflation rate.
• Economists were concerned when the annual inflation rate surged to 8%.
• A low and stable inflation rate is generally considered beneficial for economic growth.
• The government's target is to keep the inflation rate at around 2%.

Advanced Usage

• "Core inflation rate": A measure of inflation that excludes volatile items like food and energy prices to show the underlying, long-term trend.
  • While headline inflation was high, the core inflation rate remained more moderate.

Variants and Related Words

• Inflation (n): The general increase in prices and fall in the purchasing value of money. ("Inflation rate" is the specific measurement of "inflation".)
• Deflation rate (n): The rate of decrease in the general price level of goods and services.
• Disinflation (n): A slowdown in the rate of inflation (prices are still rising, but at a slower rate).
• Hyperinflation (n): Extremely high and typically accelerating inflation.

Synonyms

• Rate of inflation
• Price rise rate

Related Terms and Concepts

• Consumer Price Index (CPI): A common measure used to calculate the inflation rate by tracking the price change of a basket of consumer goods and services.
• Purchasing power: The value of a currency expressed in terms of the amount of goods or services it can buy, which declines as the inflation rate rises.
• Monetary policy: The process by which a central bank manages the money supply and interest rates, often with the goal of controlling the inflation rate.

Noun

1. the rate of change of prices (as indicated by a price index) calculated on a monthly or annual basis