There is a usually a limit on how much consumers will pay for a given product. But figuring out what that limit is not easy.
If people think prices will rise, they will modify their behavior. That could, in turn, lead to price hikes.
A Federal Reserve survey found consumers are expecting inflation to hit 4% next year.
There was a 0.6% increase in prices over April and 5% over the past year, the biggest 12-month inflation spike since 2008.
Higher costs for labor and supplies are increasing price tags.
Inflation data shows that consumer prices went up 4.2% year over year — the most since 2008.
The gains are largely expected to be a temporary blip rather than a reawakening of dormant inflation.
Low inflation is a sign that the recovery may be losing steam.
The modest increase in Producer Price Index numbers could be good inflation, considering.