What is inflation?
The same dollar grows a little lighter.
The dollar in your wallet does not change, yet it buys a little less each year. What it means for prices to rise — weighed in numbers.
In 30 seconds
- Inflation is a sustained rise in prices overall. The same money buys less and less.
- On US consumer prices, shopping that cost one dollar in January 2000 cost about $1.98 in August 2026.
- The IMF projects world inflation of 4.7% for 2026 (July 2026).
One dollar, nearly two.
In a little over 26 years, the money needed for the same shopping has roughly doubled.
What the same shopping as $1 in January 2000 cost in August 2026
Calculated on US consumer prices. It differs by country.
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US prices
The US Bureau of Labor Statistics’ consumer price index stood at 168.8 in January 2000 and 334.980 in August 2026.[1]
On that ratio, shopping worth one dollar in January 2000 cost about $1.98 in August 2026. Put the other way, a dollar today buys about half of what it did in January 2000 (our calculation).
3.4% in a year.
US prices rose 3.4% over the past year.
Rise in US consumer prices over one year (August 2026)
Calculated on the index not adjusted for season.
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The past year
The US consumer price index rose from 323.976 in August 2025 to 334.980 in August 2026, a rise of about 3.4% (our calculation).[1]
The world outlook: 4.7%.
The IMF has raised its projection for world inflation in 2026.
IMF projection for world inflation in 2026
A July 2026 projection, not a final figure.
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The world outlook
In July 2026 the International Monetary Fund (IMF) revised its projection for world inflation in 2026 up to 4.7%, explaining that the disinflation under way since early 2024 has stalled.[2]
Inflation differs widely by country. What is shown here is the projection for the world as a whole.
Until it weighs half as much.
If prices keep rising, the time until money loses half its value can be estimated.
Estimated time for money to lose half its value if prices keep rising 3.4% a year
A rule-of-72 calculation assuming the same rate continues.
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The rule of 72
Divide 72 by the annual rate to estimate how many years it takes to double.[3] If prices keep rising 3.4% a year, 72 ÷ 3.4 gives about 21 years, by which time the same money buys about half as much (our calculation; more precisely about 20.7 years).
Actual inflation changes from year to year. This is a rough guide to the mechanism.
A scale for reading prices.
A scale for reading inflation.
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The rise over a year
How much prices in your country rose over the past year.[1]
The world outlook
Which way projections from the IMF and others have been revised.[2]
The weight of money
An estimate of how long until money loses half its value if the rise continues.[3]
This is not advice
This edition explains how prices work. It does not recommend any investment or the buying or selling of any currency.
Next question
NEXT QUESTIONInterest brings more interest with it.NEXT QUESTIONWhat the same loaf costs across a border.See the Field Notes shelf →What this edition cannot tell you
- Inflation rates by country. Check each country’s statistics office.
- A detailed analysis of why prices rise.