Have you noticed that Uber fares have shot up? Or that your weekly grocery run now costs more than what you budget? You’re not imagining things.

A recent analysis tracked as much as a 40% rise in rideshare cost this spring vs. last year. And 83% of shoppers surveyed in June and July say they’ve seen prices rise on the food and household items they buy regularly.

Can we attribute these price hikes to runaway inflation? Or could they indicate something else? Here's a quick inflation primer on what it all means, what to know now and what to expect in the near term.

What is inflation?

Simply put, inflation is a rise in prices over time for the everyday goods and services we normally buy. But unlike one-time price increases for a couple of things, inflation involves sustained, higher prices for many items.

These price changes are measured by the Consumer Price Index for all Urban Consumers (CPI), which is updated monthly by the U.S. Bureau of Labor Statistics (BLS). The CPI is the government’s main gauge of inflation. All the data tucked within the CPI represents about 93% of the nation’s population and collects prices on various items from 75 urban areas across the country. A related measure, known as the core price index, strips away the often highly variable food and energy costs.

Is inflation happening now?

The latest CPI data — released Aug. 11 — confirms that inflation is here. Prices stayed high during July as the economic recovery continued. But their monthly pace cooled off a bit, even in the heat of summer.

Overall, consumer prices climbed 5.4% in July from a year earlier, the same pace as in June, but the highest 12-month rate since 2008. The CPI rose a seasonally adjusted 0.5% in July from June — considerably slower than its 0.9% increase in June from May.

Homes, food, energy and new cars were key drivers of inflation growth last month, the data shows. Among categories in the core CPI, lodging (like hotels and motels) and car repair service also got more expensive, rising 6% and 2%, respectively, in July. The good news is that it appears that prices peaked in used vehicle sales and car rentals.

What’s the trouble with inflation?

Inflation impacts the purchasing power of your dollars over time. Here’s an example: Today you’d need almost $121 to buy what $100 would have bought you a decade ago. (You can use the Federal Reserve Bank of Minneapolis’ Inflation Calculator to see how far your dollar goes today compared with previous years, based on the CPI).

That type of lesser buying power is already leading more than 90% of us to adopt some inflation-management tactics. These include switching to lower-priced brands, pursuing promotions and discounts and cutting back on discretionary spending.

What triggers inflation?

Inflation often stems from an imbalance of supply and demand that’s typically driven by several impactful factors. When the economy speeds up rapidly, for instance, consumers with pent-up wants will spend more and that increase in demand can ratchet up prices.

Inflation can also happen when there’s a shortage of labor or an important material — say, gas or computer chips — sending both production costs and prices higher for a shrinking supply.

Another key inflation source? A major economy-busting event — such as the pandemic — that spurs major changes in supply and demand or leads to recession.

What are the signs of inflation?

If you think that box of breakfast cereal you just bought looks somehow smaller but still costs the same, you’ve picked up on one sneaky sign of inflationary pressure — dubbed “shrinkflation.” What are some other signals you should pay attention to?

Along with the benchmark CPI, here are a few other indicators that can define and prolong inflation in today’s economy:

• Housing costs. If the economy is in expansion mode, homes are in demand and prices rise in tandem.
• Raw materials costs. Things like copper and semiconductors are a necessity in manufacturing everything from cell phones to refrigerators. When businesses have to pay more for essential materials, they may raise prices to offset that cost.
• Wage growth. What workers get paid also affects the cost of doing business, so salary pressures, labor supply and hiring trends can contribute to inflation, too.
• Unemployment rate. As joblessness drops, inflation increases — and vice versa.

What’s in store?

It’s important to know that prices for many goods and services today could be distorted by the continuing effects of the pandemic. Once these issues fade, economists say prices may ease. Viewed that way, today’s inflation could be an expected side effect of shuttering and then reopening the economy in COVID-19’s wake.

That said, it’s tough to predict the outcome of an unprecedented situation. The Federal Reserve, however, maintains that today’s spiking inflation is temporary. But it also recently acknowledged that price pressures could continue in the coming months before taking a downward turn.

In Part 2 of our inflation series, we’ll explain the Fed’s role in inflation and how policy affects everything from borrowing to savings.