How does inflation impact consumer purchasing power in economic terms?

Inflation decreases consumer purchasing power because it leads to a general rise in prices of goods and services. When inflation occurs, each unit of currency buys fewer goods than it did before, meaning consumers need to spend more money to maintain the same standard of living. For example, if the inflation rate is 3%, and a consumer has the same amount of income, they can afford to buy 3% less than they could prior to the rise in prices. This erosion of value fundamentally affects how far money stretches, placing more strain on consumers as they adjust to higher costs for their everyday purchases. The result is that as inflation rises, unless wages or income levels increase correspondingly, consumers are unable to purchase as much as they could before, leading to a decrease in their overall purchasing power.