What Is Price Inflation?

Price inflation signifies the upward shift in the cost of goods and services. Often driven by supply-side constraints, such as rising production costs or material shortages, it reflects the supply and demand imbalance. Technology stands as a unique counterbalance: its inherently deflationary nature means that as innovation progresses, the prices of tech commodities tend to decrease to their marginal cost of production, offsetting typical inflationary trends. So while items such as electronics and software services often see falling prices, even down to being free (like the calculator app on your phone), essentials such as groceries, household products, and building materials are subject to price inflation due to logistics or production limitations in the supply chain.