Disinflation
Plain definition
Disinflation is a slowdown in the rate of inflation — prices are still rising, just more slowly than before. Moving from 8% annual inflation to 3% is disinflation; prices did not fall at any point.
In economics
Disinflation is usually the deliberate goal of anti-inflation policy: central banks raise interest rates to cool price growth without tipping the economy into deflation. The early-1980s Volcker disinflation in the U.S. — inflation fell from double digits to around 3% — is the textbook success, though it required a painful recession. Economists distinguish it from deflation because the policy risks are completely different.
Example
In 2022-2023, U.S. inflation fell from over 9% to around 3% as the Federal Reserve raised rates. Consumers still faced rising prices throughout — a grocery bill that climbed fast in 2022 kept climbing, just more slowly in 2023. That slowdown, not any price drop, is disinflation.
Disinflation is constantly confused with deflation. Disinflation: inflation rate falls but stays positive — prices still rise. Deflation: the price level itself falls — negative inflation. Headlines saying 'inflation is down' describe disinflation, not cheaper goods; the price level remains higher than before.