Inflation is a sustained rise in the general price level of goods and services.
When inflation occurs, a unit of currency generally buys fewer goods and services than before. Economists measure it with price indexes, such as the consumer price index, by comparing index values across time. Inflation does not mean every individual price rises equally; some prices can fall while the overall level increases.
Inflation can result from strong demand, rising production costs, supply disruptions, or changes in expectations and money conditions. Moderate inflation is common in modern economies, while very high inflation can damage contracts, savings, and the usefulness of money as a unit of account.
Inflation differs from disinflation, which means inflation is slowing while prices still rise. Deflation means the general price level is falling. A one-time jump in a particular price, such as a single food item, is not by itself economy-wide inflation.