Inflation Calculator

Inflation is the rate at which the general level of prices rises over time, eroding purchasing power. At 3% annual inflation, something that costs $100 today will cost $103 next year and $134 in 10 years. Money sitting idle in a low-interest account is effectively losing value every year — which is why outpacing inflation is a core financial planning goal.

The Consumer Price Index (CPI) is the most widely used measure of US inflation, published monthly by the Bureau of Labor Statistics. It tracks average price changes for a fixed "basket" of goods and services — housing, food, transportation, medical care, and apparel. The CPI-U (all urban consumers) is the standard reference, covering ~93% of the US population.

Adjusted value = Original Amount × (CPI in target year ÷ CPI in base year). For example, $100 in 1970 (CPI: 38.8) in 2024 terms (CPI: 314.2) = $100 × (314.2 ÷ 38.8) ≈ $810. You would need $810 in 2024 to have the same purchasing power as $100 in 1970.

Purchasing power declines because the money supply tends to grow faster than the production of goods and services. Central banks typically target ~2% inflation as a sign of healthy economic activity. The practical effect is that cash loses real value over time — the fundamental reason to invest rather than just save.

US inflation has averaged approximately 3.1% annually since 1913. The 1970s saw the highest sustained inflation, peaking at 13.5% in 1980. Inflation averaged ~1.7% from 2010–2020. The post-pandemic surge hit a 40-year high of 9.1% in June 2022, before declining back toward 2–3% by 2024.