Historical US inflation reference
The table below shows long-run US CPI data published by the Bureau of Labor Statistics. Historical averages are reference values; future inflation is uncertain.
| Period | Average annual CPI inflation (US) |
|---|---|
| 1913–2023 (full CPI history) | ~3.1% per year |
| 1970–1979 | ~7.4% per year (oil-shock era) |
| 1980–1989 | ~5.6% per year |
| 1990–1999 | ~3.0% per year |
| 2000–2009 | ~2.6% per year |
| 2010–2019 | ~1.8% per year |
| 2020–2023 | ~4.8% per year (COVID-era spike) |
- The inflation rate used in this calculator is assumed to be constant over the entire projection period. Actual inflation is variable and cannot be predicted with certainty over long horizons.
- The 'purchasing power' result shows how much the entered amount of future money can buy in goods priced today — in other words, the real value of a future nominal sum expressed in present-day terms. This is the relevant figure for assessing retirement savings adequacy.
- This calculator uses the general CPI as its reference. Different categories of goods and services experience different rates of price change: healthcare and education have historically risen faster than general CPI in the US, while technology goods have often declined in price.
- The Federal Reserve's 2% inflation target applies to the Personal Consumption Expenditures (PCE) price index, which is slightly different from CPI in its basket composition and weighting methodology. CPI has historically run about 0.3–0.5 percentage points higher than PCE.
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises over time, corresponding to a decline in the purchasing power of money. When inflation is positive, each unit of currency buys fewer goods and services than in the prior period. Central banks in most developed economies, including the US Federal Reserve and the Bank of England, target low and stable positive inflation — typically around 2% per year — as conducive to sustainable economic growth.
The Consumer Price Index (CPI) is the primary measure of inflation used in the United States. Published monthly by the Bureau of Labor Statistics (BLS), the CPI measures the average change over time in prices paid by urban consumers for a basket of goods and services including food, housing, apparel, transportation, medical care, and education. The Federal Reserve uses the Personal Consumption Expenditures (PCE) price index as its preferred inflation gauge, but CPI is more widely cited in everyday contexts.
Inflation compounds: a 3% inflation rate does not simply add 3% to prices each year — it multiplies them. After 10 years at 3%, prices are approximately 34% higher than the starting point (1.03^10 = 1.344), not 30% higher. This compounding effect is why inflation has a substantial impact over long horizons such as retirement planning.
How to use this inflation calculator
- Enter the current amount — what a basket of goods or services costs today, or a sum of money whose future purchasing power you want to assess.
- Enter the expected average annual inflation rate. The US Federal Reserve targets 2% annual PCE inflation. Long-run historical CPI averages in the US have been approximately 3–3.5% over the 20th century.
- Enter the number of years.
- Read the future cost (how much the same basket would cost after inflation), the purchasing power (what today's sum could buy in future dollars), and the total percentage price increase.
The inflation formula
Inflation compounds the price level year over year at the stated rate. Future cost projects the original amount forward. Purchasing power measures what the original amount can buy in future money — it is the inverse of the future cost calculation, showing that a fixed sum of money buys progressively less as prices rise.
Domande frequenti
What is the current US inflation rate?
The US Bureau of Labor Statistics (BLS) publishes monthly CPI data at bls.gov. The Federal Reserve targets 2% annual inflation as measured by the Personal Consumption Expenditures (PCE) price index. For the most current figures, consult the BLS or Federal Reserve websites directly, as rates change monthly and this calculator does not connect to live data feeds.
What inflation rate should I use for retirement planning?
Many financial planners use 2–3% as a long-run inflation assumption for retirement projections, consistent with the Federal Reserve's 2% target and recent historical averages. For healthcare expenses, which typically rise faster than general CPI, a higher assumption (3–4%) is sometimes used in specialized retirement healthcare cost models.
What is the difference between future cost and purchasing power in this calculator?
Future cost answers the question: if a basket of goods costs $1,000 today, how much will it cost in t years at a given inflation rate? Purchasing power answers the inverse: if I have $1,000 in t years, how much can it buy in today's terms? At 3% for 10 years, a $1,000 basket costs $1,344 in the future; meanwhile, $1,000 in future money has only $744 of today's purchasing power. Both use the same compound formula, in opposite directions.
How does the CPI measure inflation?
The Consumer Price Index (CPI) is compiled monthly by the US Bureau of Labor Statistics. It measures the average change in prices paid by urban consumers for a fixed market basket of goods and services across categories including food, housing, transportation, medical care, and recreation. The basket is updated periodically to reflect changing consumer spending patterns. The CPI-U (urban consumers) is the most widely cited version.
Does inflation affect all goods and services equally?
No. The CPI is a weighted average across many categories, but individual prices rise or fall at very different rates. In the United States, healthcare costs and college tuition have historically increased faster than general CPI, while manufactured goods such as electronics have often declined in price in real terms. The overall CPI represents the average experience of a typical urban consumer across all categories combined.
Fonti
- US Bureau of Labor Statistics. Consumer Price Index overview and historical data. bls.gov.
- Federal Reserve Board. The Fed's inflation goal (2% PCE target). federalreserve.gov.
- Federal Reserve Bank of Minneapolis. What is a dollar worth? Historical CPI inflation calculator (reference). minneapolisfed.org.
- Bank of England. Monetary Policy: inflation and the 2% target. bankofengland.co.uk.
- Dimson E, Marsh P, Staunton M. Triumph of the Optimists: 101 Years of Global Investment Returns. Princeton University Press, 2002. Chapter 4: Inflation and the Real Bond Returns.