What is inflation?
Inflation is a rise in the overall level of prices over time, so each dollar buys a little less. The inflation rate says how fast prices rose over a set period, usually the past 12 months.
When the rate falls but stays above zero, prices are still going up, just more slowly. They don't go back to where they were.
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Where you’ll run into inflation
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The news
The inflation rate you hear in the news often comes from the Consumer Price Index.
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Your grocery receipt
Food bought at the store has its own price index at the Bureau of Labor Statistics. That index tracks the prices of groceries separately from the overall rate.
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A raise at work
When pay rises more slowly than prices over the same year, the pay buys less than it did.
What inflation means for you
Groceries show how this adds up. Food bought at the store cost 31.9% more in September 2026 than in January 2020, by the Bureau of Labor Statistics' index of food prices at the store. That's the total rise over more than six years, not a yearly rate. See how grocery prices have climbed since 2020.
The rate is a national average across a broad basket of goods and services. Your own costs can rise faster or slower, depending on what you buy and where you live.
Even with a fixed-rate mortgage, your monthly bill can still rise. Property taxes and homeowners insurance can go up, and both are often paid through the same monthly bill.
Questions about inflation
What is the current U.S. inflation rate?
The latest published 12-month rate is 3.7% through September 2026, according to the Bureau of Labor Statistics. In September 2025, it was 3.0%.
If inflation slows, why are groceries still expensive?
Because a slower rate still means prices are rising. Prices fall only when the rate drops below zero. Until then, each year's rise sits on top of the ones before it.
Did pay keep up with prices?
Yes, by one national measure. The Federal Reserve Bank of Atlanta's Wage Growth Tracker showed pay up 3.9% over the year to September 2026, while seasonally adjusted prices rose 3.7%.
Is inflation the same in every state?
There's no official inflation rate for every state. The Bureau of Labor Statistics publishes a national rate, rates for regions and rates for some large metro areas. A metro area can cross a state line, so its rate can't stand in for a state's.
Does inflation make mortgage payments go up?
Not the principal and interest on a fixed-rate loan, which stay the same under the loan's terms. On an adjustable-rate loan, the rate can move up or down with the market after its first fixed period.
What's the difference between inflation and cost of living?
Inflation is how fast prices change over time. Cost of living is how much money it takes to cover basic expenses in a given place at a given time. A place can have a high cost of living and slow inflation at once.
Our pages that use this measure
- CPI inflation data →A separate seasonally adjusted CPI rate, month by month.
- Grocery prices since 2020 →How far food prices at the store have climbed since January 2020.
- Wage growth vs. inflation →The Federal Reserve Bank of Atlanta's pay tracker set beside the inflation rate.
- Cost of living statistics →Prices for the basics, from groceries to energy.
- Housing cost statistics →Rent, shelter prices and the cost of owning a home.
Related terms
- Cost of LivingHow much money it takes to cover basic expenses, such as housing, food and transportation, in a given place at a given time.
- Purchasing PowerThe goods and services purchasable with a given amount of money.
- Real WagesPay adjusted for inflation. Real wages grow only when pay rises faster than prices.
Sources and method
The card and charts use the Bureau of Labor Statistics' headline 12-month change in the Consumer Price Index for All Urban Consumers, all items, before seasonal adjustment. The stored monthly rates from January 2020 onward were calculated from the unadjusted BLS index CUUR0000SA0; the displayed rate is rounded to the BLS headline precision, and exact stored rates are in the downloadable CSV. BLS did not publish an October 2025 index, so neither chart joins the months on either side. The grocery figure separately uses the seasonally adjusted BLS food-at-home index (CUSR0000SAF11) since January 2020. The pay comparison separately uses the Federal Reserve Bank of Atlanta's Wage Growth Tracker and the separate seasonally adjusted CPIAUCSL series; its CPI rate can differ from the headline rate.
- U.S. Bureau of Labor Statistics · Consumer Price Index frequently asked questions, at bls.gov
- U.S. Bureau of Labor Statistics · Seasonal adjustment frequently asked questions, at bls.gov
- U.S. Bureau of Labor Statistics · Consumer Price Index, September 2026 news release, at bls.gov
- U.S. Bureau of Labor Statistics · 2025 federal government shutdown impact on the Consumer Price Index, at bls.gov
- U.S. Bureau of Labor Statistics · CPI-U all items, not seasonally adjusted (CUUR0000SA0), at data.bls.gov
- U.S. Bureau of Labor Statistics · Food at home in U.S. city average, seasonally adjusted (CUSR0000SAF11), at data.bls.gov
- Federal Reserve Bank of St. Louis · Consumer Price Index for All Urban Consumers, all items (CPIAUCSL), at fred.stlouisfed.org
- Federal Reserve Bank of Atlanta · Wage Growth Tracker, at atlantafed.org
- Consumer Financial Protection Bureau · Understand the different kinds of loans available, at consumerfinance.gov
We write with assistance from AI tools. Figures come from the data and sources named on this page.