Economy articles
How has inflation affected your dollar?
Inflation, simply put, is the rise in prices over time. As a result, each dollar buys less than it did before. Use this inflation calculator below to track the value of the dollar. See how a dollar has changed in worth during your lifetime, or even as far back as 1913, when the data begins. Or reverse the numbers and track what the cost of an item today was worth in the past.
Are wages keeping up with inflation?
No. From April 2025 to April 2026, wages grew 0.24 percentage points slower than inflation. Nominal wages — the literal dollars earned regardless of cost of living — increased by 3.6% while inflation stood at 3.8%. When wage growth trails inflation, it indicates that workers are experiencing a decrease in purchasing power from the previous year.
What is the current inflation rate in the US?
The inflation rate was 3.8%, as of April 2026. Inflation refers to the rise in prices of goods and services over time, which reduces the purchasing power of the dollar. The inflation rate is the percentage that describes how quickly these prices are rising. While several government datasets track price changes, the Consumer Price Index (CPI) represents about 90% of the US population. The CPI measures inflation by tracking the price fluctuations of a “basket of goods and services” over time, providing a clear picture of how inflation affects everyday living expenses.
What is the money supply, and how does it relate to inflation?
Grab your wallet – have any cash? Do you have a debit card? Are there coins loose in your sofa cushion? It’s all part of the national money supply. What is the money supply?The amount of money in the economy at any given time is called the “money supply” and it’s one of many metrics the Fed uses to monitor the economy — because of how it helps us understand inflation. Policymakers scrutinize the money supply to see what’s driving inflation so they can figure out how to mitigate it, an economic goal with no party lines. Broadly, the money supply is the total amount of money circulating through the economy. Specifically, the Federal Reserve defines it as the group of safe assets that households and businesses can use to make payments or hold as short-term investments, which includes both physical cash and money in accounts that are easily accessed. Economists commonly use two measures of money supply, M1 and M2. M1 includes physical currency in circulation along with checking, savings, retirement, and similar accounts. M2 is a broader measure that adds funds held in small-denomination time deposits (like certificates of deposit or CDs) and retail money market mutual fund shares. The main distinction between M1 and M2 is how easy it is to access these assets; M2 assets can be converted into cash, but it takes a bit more effort to access them than M1 assets.
What are the biggest drivers of inflation in the past year?
Housing and transportation were the main drivers of inflation from April 2025 to April 2026. As of April 2026, overall prices increased 3.8% over the previous year. Of this, 1.6 percentage points came from price increases in housing, or about two-fifths of it.The inflation rate is calculated using the Consumer Price Index (CPI), which tracks the price changes of a consistent basket of goods and services over time. Each item in this basket is given a weight that reflects how much the average urban household spends on it. Items with higher weights, like shelter, tend to have a larger impact on the overall inflation rate than other categories. By examining the price changes across different categories, we can better understand the factors contributing to the current inflation rate.
How much is spent on personal healthcare in the US?
Between the money spent by private insurance, Medicare and Medicaid, and people making out-of-pocket payments, America spent a total of $4.5 trillion on personal healthcare in 2024, according to the Centers for Medicare and Medicaid Services (CMS).
Why might prices feel high if inflation is slowing?
Inflation has eased since a 2022 peak, but an estimated three-quarters of American adults are still concerned about coming price increases. While the inflation rate has dropped to 2.9% as of December 2024, Americans are feeling the lasting impact of a historic spike. How is inflation trending? After rising to a 40-year high of 9.1% in June 2022, the inflation rate trended down for much of 2023 and 2024, falling to a low of 2.4% in September 2024 before ticking up over the next few months. The declining inflation rate means prices have been rising at a more gradual pace, and this can in turn mean less stress on consumers.
How will the Inflation Reduction Act change the IRS?
The Inflation Reduction Act, which recently passed the House and the Senate, puts $80 billion toward expanding the Internal Revenue Service (IRS). More than half of the funds will go toward expanding the enforcement division that conducts audits on individual and corporate tax returns. Currently, corporations making over $20 billion are audited the least of any size company but make up the largest share of additional tax revenue from audits.The IRS's budgey has remained about the same since the 1990s, despite processing more returns every year. The $80 billion expansion is nearly six times the size of the IRS’s current annual operating budget and expires in 2031.
What is inflation and how is it measured?
In economic discourse, economists, government, and media often refer to the concept of inflation — general price increases in an economy.Inflation measures a nation’s economic wellbeing, in part because it reflects consumer experience — rising inflation means an increase in cost of living.What causes inflation?Inflation is a byproduct of supply-and-demand economics. Prices rise when the demand for goods and services outpaces the production of those goods and services, or when raw materials used in production and other “input goods” are in limited supply.As a result, the amount a dollar can buy is reduced over time. For example, imagine an item that cost $1.50 in 1920. After accounting for inflation, that same item would cost $9.80 in 1990 and $22.85 in 2023.How is inflation measured?There are many ways of measuring inflation, but one of the most common measures is the Consumer Price Index for Urban Consumers (CPI-U), which is produced by the Bureau of Labor Statistics. The CPI-U shows changes in the prices paid by urban consumers for a “representative basket of goods and services,” or the most common goods and services purchased on an average month based on detailed surveys of what Americans spend their money on. The urban consumer group represents about 93% of the US population.There are eight major purchase categories covered in the CPI-U:Food and beveragesHousingApparelTransportationMedical careRecreationEducation and communicationOtherNot all categories are considered equally when generating the overall measure of inflation — each category is assigned a “relative importance” based on its proportion of all expenditures. In the most recent CPI calculations, housing was weighted the most heavily.The overall CPI, also known as “headline” CPI, includes all items in more than 200 categories. Since food and energy categories are typically much more volatile than the other parts of the CPI, some choose to focus on a metric called the “core” CPI which excludes these two categories.
How did the Inflation Reduction Act of 2022 change corporate taxes?
The Inflation Reduction Act, signed by President Joe Biden on Aug. 16, 2022, changed the way large corporations are taxed. The law imposed a minimum 15% tax on corporations that made $1 billion in average annual earnings over the past three years.Corporations report income in two different ways: book income and taxable income. The 15% minimum tax applies to book income with some adjustments.The minimum book tax's objective is to ensure that businesses pay taxes when making a profit. The tax took effect in 2023. The Joint Committee on Taxation estimated that about 150 corporations would be subject to the minimum tax each year, and that it will result in a gain of $222 billion over 10 years.A Congressional Research Service report estimated that about half the tax revenue would be collected from manufacturing companies (with about 16% from chemical manufacturing) and about 11% each from information and holding companies.
What the Personal Consumption Expenditures Index (PCE) says about the US
When Americans consider rising and falling prices, they often focus on the national inflation rate. However, there are many ways to assess the costs of goods and services, including the Personal Consumption Expenditures Price Index (PCE).The PCE is a monthly assessment of the prices people in the United States pay for goods and services across a wide range of consumer expenses. Much like the Consumer Price Index (CPI), the PCE reflects changes and insights into consumer behavior.What are the differences between the CPI and the PCE?Both the CPI and PCE examine the state of consumer prices in the United States. They are released monthly and also offer a “core” version of the price index that excludes the most volatile categories: food and energy.One of the main differences between the two is who reports them. While the Bureau of Economic Analysis is responsible for the PCE, the Bureau of Labor Statistics releases the CPI based on the Consumer Expenditure Survey conducted by the Census Bureau. The PCE is based on multiple business-focused Census surveys, such as the Service Annual Survey and the Quarterly Services Survey.The PCE and CPI also use different mathematical formulas to analyze data.Insight into consumption and spending behaviorsThese methodological differences mean that the PCE measures the change in goods and services consumed by all households and the nonprofit institutions serving them. As a result, the PCE provides insights into items and expenditures that are outside the scope of the CPI.A good example is medical care services. The PCE includes services that are paid for on behalf of consumers through employer-provided health insurance and programs like Medicare and Medicaid. In comparison, the CPI only includes household out-of-pocket expenses.
What is the Federal Reserve?
The Federal Reserve, also known as "the Fed," is the central bank of the United States. It was established in 1913 to manage the nation’s monetary policy and respond to stresses in the banking system. What does the Federal Reserve do?The Federal Reserve uses its monetary policy tools to influence the national economy. In practice, this means the Fed manages federal fund rates and the money supply to support job growth and keep prices steady. Supporting maximum employment and stable prices is known as the Fed’s “dual mandate.”The Fed makes short-term changes in federal fund rates to influence long-term economic growth and stability. The Fed aims to maintain a 2% inflation rate (although it’s been known to set a higher short-term inflation target to manage economic stability). The Fed closely monitors the core Personal Consumption Expenditures index, or core PCE, when making decisions about interest rates and mediating inflation.
What is the gross domestic product (GDP) in the US?
The gross domestic product (GDP) was $24.2 trillion in Q1 2026. GDP measures the value of goods and services a country or state produces — it’s the sum of consumer spending, business investment, government spending, and net exports. It is often used to quantify the size of its economy. The $24.2 trillion is the “real GDP,” which is adjusted to account for inflation to make it easier to compare the size of an economy over time.
Are groceries more expensive than last year?
Grocery store food prices increased 2.1% from January 2025 to January 2026, according to the Bureau of Labor Statistics (BLS). That’s less than the increases for utility gas (9.8%), electricity (6.3%), medical services (3.9%), and shelter (3.0%), but more than new vehicles (0.4%), transportation services (1.3%), apparel (1.7%), and gasoline (-7.5%). A 2.1% increase is 0.1 percentage points above the 2% of the Federal Reserve’s inflation target, which aims to foster stable economic development.
What do Americans think of the economy?
In 2025, 45% of American adults felt that their local economy was in good or excellent shape, down from 46% in 2024. The share assessing the state of the national economy as good or excellent dropped from 29% in 2024 to 26%.The Federal Reserve produces an annual report on the economic well-being of US households, allowing for comparisons over time.How have Americans’ feelings about the economy changed?In 2019, 63% of adults felt that their local economy was in either good or excellent shape, while 50% thought the same of the national economy. In 2022, both sentiments hit low points at 38% locally and 18% nationally.Both figures had been increasing since 2022.
Just the Facts about the US economy
How does the government measure the economy? By tracking GDP, unemployment numbers, and the prices people pay for goods and services.
What is the federal poverty level?
The federal poverty guidelines — also known as the federal poverty level (FPL) — are used by federal agencies to determine eligibility for programs like Medicaid and the Children’s Health Insurance Program (CHIP). These guidelines are issued annually by the Department of Health and Human Services (HHS) and are based on the official poverty thresholds calculated by the Census Bureau. They set the income limits for many need-based programs, helping determine who qualifies for assistance. While the thresholds are more detailed and used for statistical measurement of poverty, the FPL is a simplified version designed for administrative purposes. The guidelines are adjusted for inflation each year and vary by household size.
How much debt does the average person in the US owe?
Around $63,300 as of the third quarter of 2025. Compared to the previous quarter (April through June 2025), the average adult owed $136 less after adjusting for inflation, reflecting slight shifts in household borrowing patterns. This debt, often referred to as “household debt,” represents the total amount owed by individuals for obligations such as mortgages, student loans, credit cards, and auto loans.
What is the income of a US household?
The median household income in the US was $81,600 in 2024. Household income is the total money received in a year — wages, pensions, investments, public assistance, and more — by everyone in a household over 15.
What does the Bureau of Labor Statistics (BLS) do?
The Bureau of Labor Statistics (BLS) is a subdivision of the US Department of Labor responsible for measuring labor market activity, working conditions, and price changes in the economy. The agency collects, analyzes, and disseminates essential economic information to support public and private decision-making. It also conducts research and provides data on employment, unemployment, inflation, productivity, and other economic indicators. It was established in 1884.