Why Do Inflation Rates Always Seem to Surprise Us?

Imagine you have a piggy bank with $10. Every year, your parents add $1 more to it. That's like having inflation, your money grows a little each year. But sometimes, the piggy bank gets filled too fast or too slow, and that surprises everyone.

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Examples

Your ice cream costs $2 now, but next year it might be $3, that's inflation.
Your parents say you get a new toy every year, but sometimes they forget, that's like an inflation surprise.
You save your allowance for a video game, but when you go to buy it, the price is higher than expected.

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Categories: Economics · inflation· economics· money· finance· consumer behavior