US Inflation Calculator

This calculator helps you determine the inflation-adjusted value of money in the US over time. It allows you to visually compare the purchasing power of the dollar across different historical periods to understand how the cost of living has changed.

CPI and Inflation

The "Basket of Goods" Analogy

To understand the Consumer Price Index (CPI), suppose you go to the grocery store to buy a specific "basket" of goods: a gallon of milk, a loaf of bread, a dozen eggs, and a pound of coffee. If you buy this exact same basket every month, you will notice the total receipt price changes over time.

The Bureau of Labor Statistics does this on a massive scale. They track the prices of a fixed basket of thousands of goods and services (including food, housing, transportation, and medical care) across the country. The CPI is the index number that represents the total cost of this basket.

Defining Inflation

Inflation is the rate at which the general level of prices for goods and services is rising. As inflation rises, every dollar you own buys a smaller percentage of a good or service. Essentially, inflation is the decline of purchasing power over time.

Inflation Rate(YoY)

The Year-over-Year (YoY) inflation rate measures how much prices have changed compared to the same month in the previous year. It is calculated by comparing the CPI of the current month to the CPI of the same month one year ago.

The math behind it is: $\text{Inflation Rate (YoY)} = \frac{CPI_{current} - CPI_{previous\ year}}{CPI_{previous\ year}} \times 100\%$

Where:

• $CPI_{current}$ is the Consumer Price Index for the current month.
• $CPI_{previous\ year}$ is the Consumer Price Index for the same month in the previous year.

Key Concepts to Know

• Purchasing Power: This refers to the quantity of goods or services that one unit of money can buy. Inflation erodes purchasing power.
• Deflation: This is the opposite of inflation. It occurs when the general price levels decline (the inflation rate becomes negative), making money worth *more* over time.
• CPI-U: There are different types of CPI. This calculator uses CPI-U, which covers "All Urban Consumers" and represents the spending patterns of about 93% of the total U.S. population.

Original CPI Data Table

You can refer to the original CPI data table below for detailed monthly CPI values used in the calculations. You can search for specific months to see the accurate CPI values.

FAQ

How we calculate the inflation-adjusted value?

To calculate how much a specific amount of money from a past year would be worth in a different year, we use the ratio of the CPI values from those two periods.

The formula for the Inflation-Adjusted Value is:

• $\text{Value}_{base}$: The original dollar amount you want to convert.
• $CPI_{base}$: The CPI index value for the starting month/year.
• $CPI_{target}$: The CPI index value for the ending month/year.

For example, if the CPI today is twice as high as it was in 1990, the adjusted value of a dollar from 1990 would be two dollars today.

Why the yearly average inflation rate may differ from the official reported rate?

The yearly average inflation rate calculated using monthly CPI data may differ slightly from the official annual inflation rate reported by the Bureau of Labor Statistics (BLS). This discrepancy can arise due to several factors:

1. How to missing months are handled: If data for certain months are missing or incomplete, different methods of estimation can lead to variations in the calculated average. Our approach uses simple averages of available monthly data.
2. Rounding differences: The BLS may round figures differently than a straightforward average calculation.
3. Seasonal adjustments: The BLS often provides seasonally adjusted inflation rates, which can differ from simple averages of monthly data.

Tips for interpreting results

• When the adjusted amount is higher: If the result is higher than your original amount, the purchasing power of the dollar has decreased. For example, if $100 in 2000 is equivalent to $160 in 2025, it means prices have risen, and you now need $160 to buy what $100 bought previously.
• When the adjusted amount is lower: If the result is lower than the original amount, the purchasing power has increased due to deflation. For example, if $100 in 1930 is equivalent to $90 in 1940, it indicates that prices generally fell during that decade.
• Long-term planning: Over long periods, even low inflation acts like compound interest against your savings. It is crucial to factor in inflation when planning for retirement or long-term investments to ensure your future savings have enough real purchasing power.

Data source

The data used in this calculator is the Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (Series ID: CUUR0000SA0), sourced directly from the U.S. Bureau of Labor Statistics (BLS).

• Update Frequency: We periodically update this data to ensure the most recent economic conditions are reflected.
• Seasonality: The values used are not seasonally adjusted, meaning they reflect the actual prices consumers paid without statistical adjustments for seasonal buying patterns.

CPI Series Reference: CUUR0000SA0 (CPI-U, All items, U.S. city average).