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."
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."
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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)
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
More History
- 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
