Inflation in a healthy economy is typically in the range of two percentage points.

Inflation can stimulate spending and encourage demand and productivity when it is within range. But when inflation surpasses wage growth, it can be a warning sign of a struggling economy.

During inflation, companies usually pay more for input materials. To maintain gross margins, companies raise prices for consumers.

However, if price increases are not executed carefully, companies can damage customer relationships, depress sales, and hurt margins.  But done right, recoveri...

• Post World War II, price controls, supply problems and extraordinary demand caused double-digit inflation.  It peaked at 20 percent in 1947 and subsided at the end of the decade. 
• The mid-1960s to the early 1980s saw some of the highest inflation rates, with a peak of 14.8 percent in...

Statistical agencies measure inflation by determining the current value of a “basket” of various household goods and services. This is referred o as a price index. 

Agencies compare the value of the index over one period to another, such as month-to-month for a monthly rate of inflation or ...

1. Adjust discounting and promotions and revisit other aspects of sales inapplicable to the base price.
2. Develop the art and science of price change. Don’t make across-the-board price changes but tailor pricing actions.
3. Accelerate decision-making by est...

Deflation occurs when the overall level of prices in an economy declines and the purchasing power increase. It can be driven by growth in productivity and the abundance of goods and services, a decrease in demand, or a decline in the supply of money and credit.

Generally, moderate deflation...

Households lose purchasing power when the prices increase for items such as food, utilities and gasoline.

Companies lose purchasing power when prices increase for inputs used in production. In response, companies typically raise the prices of their products...