Prices rose 2.6% between October 2023 and the same month in 2024, an unremarkable figure.  

Yet, inflation seems to be on everyone’s minds. 

This month, higher prices helped deliver the presidency from the Democrats to Donald Trump. A CBS News Election Day poll showed three-quarters of voters considered inflation a hardship.  

“I think that cumulative inflation is the main reason people were annoyed, going into this election,” said Ryan Bourne, an economist at the Cato Institute, a libertarian think tank. 

The emphasis here is on “cumulative.” Inflation has eased, but prices are likely higher for good: about 21.4% higher since February 2020, according to an analysis by the personal finance site Bankrate.   

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To supermarket shoppers paying nearly $2 more for a dozen eggs compared to the start of 2020, Bourne and others said, it might not matter what the inflation rate is now. 

Here, then, are some basic facts about inflation, the pandemic-era inflation crisis, and who, if anyone, deserves blame. 

What is inflation? 

Simply put, inflation means rising prices.  

In more nuanced terms, inflation is the rate that prices increase over a period of time, typically measured by the month or year.  

American consumers experience inflation when they lose purchasing power because of rising prices.  

Inflation is almost always with us, because prices usually rise. “High” inflation means prices are rising faster than usual. Low inflation means prices are rising more slowly.  

Over the past 20 years, the annual inflation rate mostly hovered between zero and 3%. That would be considered low inflation.  

Between 2021 and 2023, by contrast, the inflation rate soared to a 40-year peak of 9.1%. That is high inflation. 

What, exactly, is causing inflation? 

Economists cite several reasons for the inflation crisis of 2022: 

1. The COVID-19 pandemic. To many economists, this is the biggie. The global pandemic shut down much of the economy in 2020. When the world reopened, consumers found many products and services running short. Demand exceeded supply, the classic formula for inflation. 
2. The stimulus effort. The Trump and Biden administrations responded to the COVID-19 downturn with stimulus aid, sending checks to American homes. The Federal Reserve lowered interest rates and pumped money into the economy. Those moves rescued the economy, several economists told USA TODAY. They also probably made inflation worse. 
3. The Russia-Ukraine war. In February 2022, Russia invaded Ukraine. Many economists cite that event as a leading factor in the run-up of consumer prices. Inflation hit 8.5% the next month. Gas prices soon soared past $4 a gallon.  

The Federal Reserve is still battling to bring inflation back down to its target rate, 2% a year. A small amount of inflation is considered good for the economy. 

What is the inflation rate today? 

Prices were 2.6% higher in October than a year earlier, according to the latest Consumer Price Index, released last week. That's a much lower inflation rate than American consumers endured through much of 2022 and 2023, but it's higher than the annual inflation rate for September, which was 2.4%. 

Lingering inflation illustrates the nation's inflation crisis is not over, economists said, and that the Fed's battle against rising prices must go on. 

Does government spending cause inflation? 

Yes, economists say: government spending can definitely cause inflation. Many economists say federal spending caused at least some of the inflation crisis in 2022. 

In March 2021, President Joe Biden signed a $1.9 trillion stimulus bill, directing payments of up to $1,400 to pandemic-stricken Americans. The Trump administration had already sent two rounds of stimulus checks in 2020.  

Some economists pilloried Biden at the time, saying the third round of stimulus relief went too far. That sentiment has since increased.

Taken together, the Trump and Biden stimulus bills “amounted to something like 20% of GDP,” the nation’s total economic output, said Desmond Lachman, a senior fellow at the right-leaning American Enterprise Institute, in a recent USA TODAY interview. “That is the largest fiscal stimulus we’ve had in peacetime. That, I think, is a big part of the story.”  

Is the Biden-Harris administration to blame for inflation? 

The 2024 election was, to some extent, a referendum on inflation. Voters were mad about higher prices, and they blamed the Democrats.   

Was that fair?  

Yes, economists said, but only to a degree. Of seven economists who spoke to USA TODAY for a recent report, most cited the global pandemic, not Biden, as the primary cause of the inflation crisis. Opinions varied.

More:Voters blamed Biden and Harris for rising costs. Was that fair? We asked economists.

“There’s a long list of reasons for the high inflation,” said Mark Zandi, chief economist at Moody’s Analytics. “The Biden-Harris policies that are on the list are at the very bottom.”  

“I don’t pin the blame all on the Biden administration,” said Bourne of Cato. “But certainly, the Biden administration didn’t help the situation.”   

What is Fed Chair Jerome Powell doing about inflation? 

The Fed, too, bore some blame for causing the 2022 inflation crisis with its response to the 2020 pandemic downturn, economists told USA TODAY. The central bank boosted the money supply and lowered interest rates.  

Then, in response to spiraling inflation, the Fed reversed course. Between March 2022 and July 2023, the central bank raised interest rates by more than 5 full percentage points, from effectively zero to a peak of over 5%.  

Inflation eventually cooled: the annual rate has hovered below 4% since June 2023. Many analysts, including Powell himself, credit the Fed with success. 

“By keeping monetary policy restrictive, we helped restore the balance between overall supply and demand in the economy,” Powell said in a September speech. “That patient approach has paid dividends.” 

How to calculate inflation 

To calculate the inflation rate, the personal finance site NerdWallet advises, all you need is a start date, an end date and a chart of the Consumer Price Index, which measures price changes over time. 

Here’s how to do it, according to NerdWallet: 

1. Subtract the CPI at the start date from the CPI at the end date. 
2. Take that number and divide it by the CPI at the start date. 
3. Take that number and multiply it by 100. Add a percent sign. That is the inflation rate. 

For example: the CPI in 1990 was 130.7. The CPI in 2010 was 218.06. To determine the inflation rate between 1990 and 2010, subtract 130.7 from 218.06. Take the difference, 87.36, and divide it by the CPI on the start date, 130.7. Take that result and multiply it by 100 to get 66.8. That’s the rate of inflation between 1990 and 2010: 66.8%.