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Inflation Analysis 

US Inflation Rate by Year from 1929 to 2020 
​
How Bad Is Inflation? Past, Present, Future
BY KIMBERLY AMADEO 
Updated June 25, 2019

The U.S. inflation rate by year is the percentage change in prices from one year to the next, or year-over-year. The inflation rate responds to each phase of the business cycle. The first phase is expansion. That's when growth is positive, with healthy 2% inflation. As the economy expands beyond 3% growth, it creates asset bubbles. It creates the second phase, which is the peak. That's the month when expansion ends and contraction begins. Inflation will rise to 3% or more.

The third phase is contraction, which is a recession. Inflation falls below 2%. During a recession, deflation becomes a threat. The inflation rate falls into negative territory. The fourth phase is the trough. That's the month when the contraction ends and expansion begins. After that phase, inflation turns positive again. Inflation also responds to the monetary policy enacted by the Federal Reserve.

The Fed focuses on the core inflation rate because it excludes volatile gas and food prices. The Fed sets a target inflation rate of 2%. If the core rate rises much above that, the Fed will execute contractionary monetary policy. This increases interest rates, shutting down demand and forcing prices lower.

U.S. Inflation Rate History and Forecast

The table below compares the inflation rate with the fed funds rate, the phase of the business cycle and the significant events influencing inflation. The most recent forecast is in the "U.S. Economic Outlook."
​Year
​

1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
​Inflation Rate YOY

​0.60%
-6.40%
-9.30%
-10.30%
0.80%
1.50%
3.00%
1.40%
2.90%
-2.80%
0.00%
0.70%
9.90%
9.00%
3.00%
2.30%
2.20%
18.10%
8.80%
3.00%
-2.10%
5.90%
6.00%
0.80%
0.70%
-0.70%
0.40%
3.00%
2.90%
1.80%
1.70%
1.40%
0.70%
1.30%
1.60%
1.00%
1.90%
3.50%
3.00%
4.70%
6.20%
5.60%
3.30%
3.40%
8.70%
12.30%
6.90%
4.90%
6.70%
9.00%
13.30%
12.50%
8.90%
3.80%
3.80%
3.90%
3.80%
1.10%
4.40%
4.40%
4.60%
6.10%
3.10%
2.90%
2.70%
2.70%
2.50%
3.30%
1.70%
1.60%
2.70%
3.40%
1.60%
2.40%
1.90%
3.30%
3.40%
2.50%
4.10%
0.10%
2.70%
1.50%
3.00%
1.70%
1.50%
0.80%
0.70%
2.10%
2.10%
1.90%
1.50%
1.90%
2.00%
​Fed Funds Rate

​NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
1.25%
2.50%
3.00%
3.00%
2.50%
4.00%
2.00%
2.00%
3.00%
3.38%
3.75%
4.25%
5.50%
4.50%
6.00%
9.00%
5.00%
5.00%
5.75%
11.00%
8.00%
6.50%
4.75%
6.50%
10.00%
12.00%
18.00%
12.00%
8.50%
9.25%
8.25%
7.75%
6.00%
6.75%
9.75%
8.25%
7.00%
4.00%
3.00%
3.00%
5.50%
5.50%
5.25%
5.50%
4.75%
5.50%
6.50%
1.75%
1.25%
1.00%
2.25%
4.25%
5.25%
4.25%
0%
0%
0%
0%
0%
0%
0%
0.25%
0.75%
1.50%
2.50%
2.50%
2.00%
2.50%
Business Cycle (GDP Growth)     

​Aug peak
Contraction (-8.5%)
Contraction (-6.4%)
Contraction (-12.9%)
Contraction ended in March (-1.2%)
Expansion (10.8%)
Expansion (8.9%)
Expansion (12.9%)
Expansion peaked in May (5.1%)
Contraction ended in June (-3.3%)
Expansion (8.0%)
Expansion (8.8%)
Expansion (17.7%)
Expansion (18.9%)
Expansion (17.0%)
Expansion (8.0%)
Feb peak. Oct trough (-1.0%)
Expansion (-11.6%)
Expansion (-1.1%) 
Nov peak (4.1%) 
Oct trough (-0.6%)
Expansion (8.7%) 
Expansion (8.0%) 
Expansion (4.1%)
July peak (4.7%)
May trough (-0.6%)
Expansion (7.1%)
Expansion (2.1%) 
Aug peak (2.1%)
April trough (-0.7%)
Expansion (6.9%)
April peak (2.6%)
Feb trough (2.6%)
Expansion (6.1%) 
Expansion (4.4%) 
Expansion (5.8%) 
Expansion (6.5%) 
Expansion (6.6%)
Expansion (2.7%)
Expansion (4.9%)
Dec peak (3.1%)
Nov trough (0.2%) 
Expansion (3.3%) 
Expansion (5.3%)
Nov peak (5.6%)
Contraction (-0.5%) 
March trough (-0.2%)
Expansion (5.4%) 
Expansion (4.6%) 
Expansion (5.5%) 
Expansion (3.2%)  
Jan peak (-0.3%)
July trough (2.5%)
November (-1.8%) 
Expansion (4.6%) 
Expansion (7.2%)
Expansion (4.2%)
Expansion (3.5%) 
Expansion (3.5%) 
Expansion (4.2%)
Expansion (3.7%)  
Jul peak (1.9%) 
Mar trough (-0.1%) 
Expansion (3.5%)
Expansion (2.8%) 
Expansion (4.0%)
Expansion (2.7%)
Expansion (3.8%)
Expansion (4.4%)
Expansion (4.5%)
Expansion (4.8%)
Expansion (4.1%)
March peak. Nov trough (1.0%)
Expansion (1.7%) 
Expansion (2.9%)
Expansion (3.8%)
Expansion (3.5%)
Expansion (2.9%) 
Dec peak (1.9%)
Contraction (-0.1%)
Jun trough (-2.5%) 
Expansion (2.6%)
Expansion (1.6%)
Expansion (2.2%)
Expansion (1.8%)
Expansion (2.5%)
Expansion (2.9%) 
Expansion (1.6%)
Expansion (2.2%)
Expansion (2.9%)
Expansion (2.1%)
Expansion (2.0%)
Expansion (1.8%)
Linear Inflation by Decade 

January 1930 through December 1939 was -18.13% ($1 after inflation required $0.82)
January 1940 through December 1949 was 69.78% ($1 after inflation required $1.70) 
January 1950 through December 1959 was 25.11% ($1 after inflation required $1.25)
January 1960 through December 1969 was 28.67% ($1 after inflation required $1.29)
January 1970 through December 1979 was 102.91% ($1 after inflation required $2.03)
January 1980 through December 1989 was 62.08% ($1 after inflation required $1.62)
January 1990 through December 1999 was 32.10% ($1 after inflation required $1.32)
January 2000 through December 2009 was 27.93% ($1 after inflation required $1.28)
January 2010 through May 2019 was 18.19% ($1 after inflation required $1.18)

Cumulative Inflation by Decade

January 1930 through May 2019 was 1,397.61% ($1 after inflation required $14.98)
January 1940 through May 2019 was 1,742.39% ($1 after inflation required $18.42)
January 1950 through May 2019 was 989.75% ($1 after inflation required $10.90)
January 1960 through May 2019 was 774.03% ($1 after inflation required $8.74)
January 1970 through May 2019 was 577.49% ($1 after inflation is $6.77)
January 1980 through May 2019 was 229.17% ($1 after inflation is $3.29)
January 1990 through May 2019 was 101.01% ($1 after inflation is $2.01)
January 2000 through May 2019 was 51.71% ($1 after inflation is $1.52)
January 2010 through May 2019 was 18.19% ($1 after inflation required $1.18)
Resources for Table
​
  • Historical Inflation Rate, Bureau of Labor Statistics. Year-over-year rate as of December.
  • Percentage of Population That Is Unemployed 1929-1947, U.S. Census Bureau. Note: This divides the number of people age 14 and over without jobs into the total civilian population.
  • Unemployment Rate 1948-2015, BLS. Note: This divides the number of unemployed who are actively looking for work into the labor force.
  • Historical Targeted Fed Funds Rate.
  • Effective Fed Funds Rate, St. Louis Federal Reserve. Used to estimate targeted fed funds rate before 1971.
  • Recession History.
  • History of Gold Standard.
  • Business Cycle Dates, NBER.
  • National Income, and Product Accounts Tables: Table 1.1.1. GDP Growth Rate, BEA.
  • The Fed uses complex computer models to create its forecasts. But so many variables change in between estimates that it's difficult to be precise three years out. The critical thing to recognize is that the Fed doesn't think inflation will be a credible threat any time soon. (Source: "Economic Projections of Federal Reserve," The Federal Reserve, December 19, 2018.)

More History
​
  • National Debt by Year
  • Deficit by Year
  • U.S. GDP by Year
  • GDP Growth by Year
  • Unemployment Rate by Year
  • Gold Prices by Year
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