[beloch]

At it's most basic level, inflation tries to measure of the affordability of living. Mango prices go down and avocado prices go up, so I buy more mangos and fewer avocados. However, what really impacts my life is how much of my income I need to spend, overall, on groceries to eat well. Inflation doesn't capture the choices I must make to optimize my grocery bill, but it does do a decent job of representing how the all-important total on my grocery bill changes.

What inflation doesn't necessarily do is capture how my grocery bill changes relative to my paycheck. If you look at the historical inflation rate, it does a semi-decent job of indicating when weird stuff happens. Wars tend to be accompanied by spikes in inflation. Things get scarce. Supply chains get disrupted. There's less stuff to be had so, on average, people can afford less stuff. Everybody is making the same salary but things cost more. Pandemics can have similar effects. (We just happen to have gone from one directly into the other.)

Deflation coincides with recessions (e.g. 1929). You'd think things getting cheaper would be indicate people can afford more stuff, but it's just the opposite. People are making less, so they buy less, and prices come down as supply exceeds demand.

Inflation does need the context of average earnings to be useful, but it is useful given that context.