What is the inflation rate?
What this series shows
When people ask what the inflation rate is, this is almost always the number they mean: the twelve-month change in the consumer price index — the figure normally meant by “inflation is running at X percent”. It is computed here from the published index level against the same month a year earlier.
The comparison figures above are the direction of travel. A rate that is lower than it was a year ago means prices are still rising, only more slowly — inflation falling is not the same as prices falling, and it is the single most common misreading of this number.
Two cautions. This is the headline index, not core: it includes food and energy, which are volatile enough to move the number without indicating a change in trend. And it is not the index the Federal Reserve targets. The 2% objective is defined on the price index for personal consumption expenditures, which weights spending differently and generally runs somewhat below CPI.