What does "inflation rate" actually mean? It's how much prices went up compared to last year. A 2.7% rate means everything costs 2.7% more than it did 12 months ago. The catch: When the rate drops, prices don't drop. They just go up slower. A $100 grocery bill that became $150 during high inflation doesn't go back to $100 when the rate falls. It becomes $154. That's why prices still feel terrible even though the "rate" looks better.
How Fast Prices Rose Each Year (2018–2026)
Each bar = how much more expensive things got that year compared to the year before. The orange line tracks grocery prices specifically. The green dashed line is the Fed's 2% target — anything above it means prices are rising faster than planned. Source: Bureau of Labor Statistics.
What $100 of Groceries in 2020 Costs You Today
This shows the cumulative damage. Each bar = what you'd actually pay today for the same $100 worth of 2020 groceries, after each year's price increases stack on top of each other. The rate going down doesn't bring this number back. Source: BLS CPI food-at-home data.
National Average Gas Price (2018–2026)
Annual average price per gallon of regular gasoline, national average. Source: EIA, AAA.
Did your paycheck keep up? Since January 2021, the average paycheck grew 21.5%. But prices grew 22.7%. You got a raise, and it wasn't enough. 43% of American workers are still falling behind — their paychecks grow every year, but costs grow faster. The charts below show this in two ways: the quarterly race between wages and prices, and what happened to a $1,000 paycheck over time.
Each Quarter: Did Wages Beat Prices?
Blue = how fast paychecks grew that quarter. Red = how fast prices rose. When red is above blue, your money is shrinking. Wages finally overtook inflation in mid-2023, but the damage from 2021–2023 is permanent. Sources: BLS, Brookings.
What Happened to a $1,000 Paycheck
Blue line = what your $1,000 paycheck grew to over time. Red line = what $1,000 worth of expenses grew to. The gap between them is money you lost. Even though wages recently started beating inflation, the total damage hasn't been recovered. Sources: BLS, Indeed Hiring Lab.
