The inflation rate can tell us a great deal about economic conditions. When the economy is strengthening, companies experience increased demand for their products and so can charge higher prices for them. As a result, revenues increase, lifting profits and permitting companies to boost capital investment and create new jobs. At the same time, however, the higher prices squeeze consumers, who may have to choose where to allocate limited funds: the more they pay for one good or service, the less they have for others. It’s a delicate balance. Too little inflation, and corporate profits tumble, curtailing capital spending and causing unemployment; too much, and consumers can’t afford to buy. The results are the same, only the course is differe....