Why everyday prices rise

Picture a bake sale: ten neighbors want the last five loaves. What happens to the price? It can climb. Now picture your grocery money buying less bread, milk, and eggs than last year. That squeeze matters when your paycheck hasn't grown too.

That ongoing climb across many prices is inflation. Like the bake sale, when buyers want more than sellers can supply, prices can rise. When sellers pay more for ingredients or delivery, they may raise prices too. One bake sale alone isn't inflation.

In the U.S., consumer prices in June 2022 were 9.1 percent higher than a year earlier. That doesn't mean every price rose equally, but your dollar bought less on average. Why do many prices rise over time? Prices rise broadly when demand outstrips supply or costs climb.