Why prices go up every year

Why does your grocery bag feel lighter while your bill gets heavier?

Inflation means prices rise across the economy, so the same money buys less.

Imagine money chasing groceries around a supermarket. Suddenly, the groceries have fans.

When demand outruns supply, sellers can raise prices.

Pricier fuel makes deliveries cost more. That can reach your checkout.

Higher wages can raise business costs, though workers may just be catching up.

It isn't just a greedy avocado. It's many prices moving together.

America's Federal Reserve targets two percent inflation over the longer run.

That's a target, not a promise. Inflation can be higher, lower, or negative.

Slower inflation doesn't mean cheaper groceries. Prices usually just climb more slowly.

Falling prices overall means deflation. Individual items can get cheaper during inflation.

If income lags behind rising prices, your budget gets squeezed.

Same wallet. Less stuff. Congratulations: your shopping bag has entered its minimalist era.