Disinflation.
In plain English
Disinflation is a fall in the rate of inflation. Prices are still rising, just at a slower pace than before, so an inflation rate easing from a higher number toward a lower one is disinflation. It is often what a central bank is aiming for when it tightens policy to cool an overheated economy without tipping prices into outright decline. The key contrast is with deflation, where the price level actually falls and the inflation rate goes below zero. Disinflation is slower increases; deflation is decreases.
01Why it matters
News often blurs falling inflation with falling prices, so knowing disinflation means prices still rise, just more slowly, keeps you from expecting the cost of things to actually drop when inflation cools.
02The math, step by step
If inflation runs hot for a while and then eases back toward a lower pace, that cooling is disinflation. Your grocery bill is still climbing, just less steeply than before. Only if prices actually started falling would it become deflation.
03What this is NOT
It is not deflation. Disinflation is a slower rate of price increases; the inflation rate stays positive. Deflation is prices falling, an inflation rate below zero. Cooling inflation rarely means cheaper prices, just gentler increases.
04Receipts
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