Dictionary.com defines inflation as: "a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency." Most countries prefer a little bit of inflation in their currency, especially because they wish to avoid falling into a deflationary environment, which America suffered through during the great Depression, to which deflation produces the twin evils of downward wage pressure on job holders or in absence of being able to achieve that, their employment is more susceptible to termination, as well as if prices are getting cheaper, consumers will delay purchases, which will slow down economic activity, creating a vicious downward spiral.
In modern times, America as demonstrated by its Consumer Price Index (CPI) which acts as a proxy for inflation, has shown consistently a small percentage growth in inflation, year by year, exactly what American policy makers' desire for the country as a whole. However, the accuracy of the measure of inflation is an issue of some controversy as different economists have different ways of measuring the real inflation rate for America as a whole. For instance, the federal government has a vested interest in posting inflation figures which are moderate because it is they that have to come up with any additional monies for cost-of-living adjustments as needed for various legacy programs, which in aggregate can be quite significant. Additionally, while the most direct way of measuring inflation is to simply take a basket of consumer goods and services and then compare those goods to the previous year to thereby come up with the annual inflation rate, the criticism of doing this is that some goods and services will not exactly be the same in regards to one year to the next for either quality, performance, or the substitutionary habits that Americans would employ if one item becomes prohibitory expensive.
This means that even though when Americans can see that the price of a dozen eggs has gone up, or meat, or gasoline, or insurance, or a wealth of other items, so too must they consider that the electronic goods that are available for purchase, often have either maintained their price or come down, and frequently with better and more sophisticated features than seen in previous years. Additionally, wherever that you do your shopping at, prices are elastic and dynamic, with seldom there being a time (with the exception of a Dollar Tree store), that the price for any particular product, no matter how common, maintains its same price year round, or instead has a small, barely incremental budge in its price that you pay a little bit more for.
While inflation is absolutely real it is also far easier to see over extended periods of time, that is to say, when you watch an old movie, and see someone paying for a drink with a nickel, or purchasing a fine dinner for less than a dollar, part of you watches that in disbelief, that there ever could have been a time when the price of these things were that cheap, but it was. Inflation today, is very difficult to measure accurately, with probably no system being foolproof, that is why transparency in how the official government inflation rate is calculated along with giving time and just due to other calculated rates by other formulas and economists will give an overall clearer picture to the whole inflation thing.
The inflation rate of currency does matter, because money is a common storage of wealth, and without taking proper measures to protect or to increase that wealth due to inflation, than that wealth will surely be eroded over time.