US Inflation Calculator

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Value in 1890:
Value in 2021:
$100 worth of Stocks in 1890 is worth $70,515.8 in 2021
Average Annual Inflation Rate from 1890 to 2021: 2.74%
Stock Market
Real Estate
Value in 2021$70,515.8$6,647.35$9,840.55$3,437.32
Cumulative Price Change70,415.8 %6,547.35 %9,740.55 %3,337.32 %
$100 in stocks in 1890 would be worth $70,515.8 in 2021 dollars.$100 in real estate in 1890 would be worth $6,647.35 in 2021 dollars.$100 in gold in 1890 would be worth $9,840.55 in 2021 dollars.$100 in cash in 1890 would be worth $3,437.32 in 2021 dollars.
Inflation-Adjusted Return1,951.48 %93.39 %186.29 %0 %
Annualized Inflation-Adjusted Return2.33 %0.5 %0.81 %0 %
Inflation-Adjusted Value in 2021$ 2,051.48$ 193.39$286.29 $100

About the Inflation Calculator

This inflation calculator uses the Consumer Price Index For All Urban Consumers (CPI-U) published by the U.S. Bureau of Labor Statistics to calculate inflation from 1871 to 2021. This measures how prices of goods and services have changed over time, and can be used to see how the historical value of the US Dollar has changed as the cost of living has changed up to the present day. Different asset classes can be compared to see how they have performed after being adjusted for inflation.

Daily inflation rates can also be found by using the breakeven inflation rate, which uses US Treasury bond yields to calculate an expected inflation rate. This allows inflation to be calculated daily in the inflation calculator above.

Current US Inflation Rate: 5.26%

As of September 2021, the current US annual inflation rate is 5.26% for the last 12 months.

This means that prices in the US have risen by 5.26% over the past year. $100 in 2020 would be worth $105.26 in 2021. In other words, $100 worth of goods and services today in 2021 would have cost only $94.61 in 2020.

What Is Inflation?

Inflation is a general rise of prices in an economy which eats away at the value of the dollar. That’s because when prices rise for the same goods and services, consumers are getting less for their money. This is also known as a loss of purchasing power, as one dollar will be able to buy less and less in the future due to inflation.

Deflation is the opposite of inflation. Instead of prices being “inflated”, deflation is when prices “deflate”, or decrease. Inflation is more common than deflation in a healthy economy. Deflation is generally seen as worse than inflation. However, high levels of inflation is also bad for an economy. That’s why the US Federal Reserve has an inflation target of 2%, which keeps inflation low, but not low enough to threaten deflation.

How Is Inflation Measured?

There are many different ways to measure inflation, but the most popular way to calculate inflation is by using the Consumer Price Index (CPI). As the name suggests, the CPI is an index that measures the prices that consumers pay at a certain point in time. Inflation is calculated by measuring how much the CPI changes over a period of time.

More specifically, the Consumer Price Index measures prices of a basket of goods and services that make up the average American’s cost-of-living. The CPI is made up of eight major groups of consumer expenditures:

  1. Food
  2. Housing
  3. Apparel
  4. Transportation
  5. Medical Care
  6. Recreation
  7. Education and Communication
  8. Other Goods and Services

CPI only includes goods and services that can be consumed. That means that CPI doesn't include investments, such as stocks or real estate. Home prices do not affect CPI.

Core Inflation

CPI including food and energy measures what is called headline inflation. Core inflation is from the CPI excluding food and energy.

Food prices and energy prices are volatile, and so they can drastically affect inflation rates. This might be from temporary shocks or events that affect food or energy prices, or it may even just be effects of seasonality on prices. Since inflation is meant to measure the change in price levels over a period of time, having volatile components can distort the inflation rate. Core inflation, which excludes food and energy, gives a better sense of inflation trends.

Just like there are different measures of inflation, there are different types of CPIs. The most widely used is the CPI for All Urban Consumers (CPI-U). The CPI-U is what is commonly referred to as the CPI. This index measures urban consumers, which accounts for 93% of the US population. This index does not include rural consumers.

Other types of CPI include the CPI for Urban Wage Earners and Clerical Workers (CPI-W), which only includes urban households that are employed and paid wages, and the Chained CPI which accounts for changes in consumer spending patterns.

How is housing calculated in CPI?

CPI measures housing costs, also known as shelter, through the cost of rent. For renters, this would be their monthly rent. For homeowners, this would be the equivalent rent that they would pay for their home. Housing costs for homeowners do not take into account their mortgage costs or any appreciation or depreciation in their home value.

Different countries use different housing costs when calculating inflation rates. The United States uses the rental-equivalence approach, which is also used by Germany, Japan, and the United Kingdom, among others. The other way to measure housing costs is the user-cost approach, which is used by Canada and Sweden.

With the user-cost approach, the cost of housing is based on the cost of renting or owning the home. For renters, this includes their monthly rent and any tenant's insurance premiums. For homeowners, this includes their mortgage interest cost, property taxes, home insurance, and maintenance. The user-cost also accounts for the cost of utilities, such as water, gas, and electricity.

For example, housing costs (shelter) makes up 26.8% of Canada’s CPI. 6.4% of Canada's CPI is monthly rent paid, while 3.5% is mortgage interest costs.

Housing Costs (% of Canada’s CPI)

Mortgage Interest Cost3.5%
Property Taxes3.4%
Home and Mortgage Insurance1.3%

Source: Statistics Canada

Why doesn’t CPI include housing prices?

CPI measures the cost of goods and services that are consumed in a period of time. When someone purchases a home, they are “consuming” their purchase over a period of many years. Not all consumers will also be buying a home within a certain period of time, which makes it not reflective of the cost of living for all consumers.

The United States uses monthly rent instead of housing prices since rent is paid by consumers every month, while a consumer won’t be buying a home every month. For existing homeowners, the equivalent rent that it would cost to rent out their home is used to estimate how much they would have to pay to live in that home every month.

Some countries do include the price of houses into their CPI, which is called the net acquisition approach. This includes Australia and New Zealand.

Inflation Calculations, Formulas, and Examples

How to Calculate Inflation

The percentage change in CPI is used to calculate inflation. To calculate inflation, you will first need to find the CPI for the years that you want to compare. The percentage change in CPI is the cumulative inflation between these years.

For example, the CPI in January 2010 was 216.69, while the CPI in January 2020 was 257.97. The percentage change is 18.97%. During this 10-year period, inflation was 18.97%. An item in 2020 costs 18.97% more than it did back in 2010. In other words, prices in 2020 are 18.97% higher than they were in 2010.

Has there ever been deflation in the US?

While there hasn’t been major deflationary periods in the US in recent history, there has been major deflation in the past, most notably during the Great Depression in the 1930’s. Between 1929 and 1933, the US CPI fell from 17.10 in 1929 to a low of 12.60 in 1933. This represents a deflation rate of 26.3% over a period of just five years!

In recent times, there have been brief periods of deflation in the US. The Great Recession in 2008 and 2009 brought about deflation, bringing the CPI from 219.09 in August 2008 to 215.83 in August 2009, or just under 1.5% deflation in one year.

The most recent deflation experienced was in early 2020 as the pandemic caused consumer spending to crater. The CPI fell from 258.68 in February 2021 to 256.39 in May 2021, for a slight deflation rate of 0.88% for a four-month period. However, the CPI then quickly rose afterwards, meaning that the trailing twelve month inflation rate did not dip into negative territory to signal deflation.

How Is Current US Inflation Rates Calculated?

The current US inflation rate is calculated using the last 12 months of the CPI. This is known as the trailing 12 months. To calculate the current inflation rate as a formula:

Current US Inflation Rate =

CPI of most Recent Month - CPI 12 Months agoCPI 12 Months ago

x 100

For example, let’s calculate the US inflation rate as of September 2021. We would first need to look at the CPI values for September 2021 and September 2020.

September 2020260.28
October 2020260.39
November 2020260.23
December 2020260.47
January 2021261.58
February 2021263.01
March 2021264.88
April 2021267.05
May 2021269.20
June 2021271.70
July 2021273.00
August 2021273.66
September 2021273.98

From this table, we see that:

  • CPI for September 2020: 260.28
  • CPI for September 2021: 273.98

Inputting this into the inflation rate formula:

Current US Inflation Rate =

273.98 - 260.28260.28

x 100

Current US Inflation Rate = 5.2635%

The current US inflation rate as of September 2021 is 5.26%.

How Does This Calculator Find The Value of a Dollar?

This inflation calculator finds the value of a dollar by using the difference in CPI between the two points. That’s because the difference in CPI measures the difference in purchasing power. If the CPI is now higher, this means that the price of goods and services are now more expensive for the same unit of currency. One dollar back then would have bought more goods and services then it would have today, which means that it would be more valuable.

For example, let’s look at the change in the value of the US Dollar from January 1871 to January 2021.

  1. Find the CPI of the starting date and the ending date

    In January 1871, the CPI was 12.46. In January 2021, the CPI was 261.58

  2. Find the percentage change in the CPI values

    Percentage Change =

    Ending Value - Starting ValueStarting Value

    x 100

    CPI Percentage Change =

    261.58 - 12.4612.46

    x 100

    CPI Percentage Change = 1,999.36%

  3. Apply the percentage change to the dollar amount

    In this case, we’re only looking at the change in the value of one US Dollar.

    $1 + 1,999.36% = $20.99

    $1 in 1871 would be worth $20.99 in 2021.

    If we look at $100 in 1871:

    $100 + 1,999.36% = $2,099.36

    $100 in 1871 would be worth $2,099.36 in 2021.

How do I calculate how much an item would have cost in the past?

Just like how CPI can be used to calculate how much a dollar in the past is worth today, CPI can also be used to calculate how much a dollar today is worth in the past. While the cost of specific items have changed, and consumption has also changed, this is a way to see how much a certain amount of money today would have been in the past.

Let’s look at $100 in January 2021 compared to January 1890. You can use the inflation rate calculator above or you can follow these steps to calculate it manually. If you bought an item for $100 in 2021, how much would it have cost you if you bought it in 1890? Rather, how much would $100 of goods and services in 2021 have cost in 1890?

  1. Find the CPI of the starting date and the ending date

    In January 1890, the CPI was 7.61. In January 2021, the CPI was 261.58.

  2. Find the percentage change in the CPI values

    Percentage Change =

    Ending Value - Starting ValueStarting Value

    x 100

    CPI Percentage Change =

    7.61 - 261.58261.58

    x 100

    CPI Percentage Change = -97.09%

  3. Apply the percentage change to the dollar amount

    The percentage change is negative since you are going from a higher CPI value to a lower CPI value. This deflates the dollar amount.

    $100 - 97.09% = $2.91

    A $100 item in 2021 would have cost $2.91 in 1890. In other words, $100 would have bought the same amount of goods and services that $2.91 would have been able to buy in 1890.

How to calculate the annual average inflation rate

To calculate the average annual inflation rate, you will need to find the compound annual growth rate (CAGR). That's because inflation and deflation compounds over time.

CAGR = Average Annual Inflation Rate Formula = ((FV / PV)1 / t - 1) x 100%


FV = Amount in End Year

PV = Amount in Initial Year

t = Number of Years

For example, let's calculate the average US annual inflation rate using the above formula between 1890 and 2021.

  1. Calculate the values in the initial year and end year

    This uses the same calculation to find the value of a dollar. Let’s say that we’re looking at $100 in 1890, which means that we will need to find the value of $100 in 1890 in 2021 dollars.

    • CPI in January 1890 = 7.61
    • CPI in January 2021 = 261.58
    • Percentage change = 100 x (261.58-7.61)/7.61 = 3,337.32%
    • $100 + 3,337.32% = $3,437.32
    • Result: $100 in 1890 (PV) is worth $3,437.32 in 2021 (FV)
  2. Find the number of years

    2021 - 1890 = 131 years

    This average annual inflation rate will be for a period of 131 years.

  3. Use the CAGR formula to calculate the average annual inflation rate

    Average Annual Inflation Rate = ((3,437.32 / 100) (1 / 131) - 1) x 100%

    Average Annual Inflation Rate = 2.737%

    The average annual inflation rate in the US from 1890 to 2021 was 2.737%.

What is inflation-adjusted return?

An inflation-adjusted return is the rate of return for an investment or cash flow after inflation has been taken out. Since inflation is when prices rise in an economy, inflation also increases the value of investments, such as stocks or commodities. Inflation-adjusted return is important since it calculates the real rate of return that is independent of inflation, or in other words, the performance of the investment above the rate of inflation. That’s why the inflation-adjusted return is also called the real rate of return.

Hedges Against Inflation

An investment might have a positive rate of return, but it doesn’t tell us much if we don’t consider the effects of inflation. If the investment had a return of 5%, but inflation over the same time period was 10%, then the investment actually has a negative inflation-adjusted return. The investment couldn’t keep up with inflation, and so it lost value.

Investments and assets that have a positive inflation-adjusted return can be considered to be hedges against inflation. By putting money into inflation hedges, you’re protecting your purchasing power in the future. However, they work better as long-term hedges against inflation, as they can still experience short-term fluctuations. Common examples of hedges against inflation include stocks, real estate, and commodities. This can include metals such as gold and silver.

How to Calculate Inflation-Adjusted Return

To calculate inflation-adjusted return, you will need to get the dollar values of what you are trying to adjust. Let's look at the inflation-adjusted return for the stock market from 1890 to 2021. Between 1890 and 2021, $100 in the stock market would have grown to $70,515.80 excluding dividends. This is a cumulative rate of return of 70,415.80%, however, we want to adjust this return to account for inflation. During the same time, the value of $100 in 1890 would be worth $3,437.32 in 2021.

  • Base Values: $100
  • Stock Market Value in 2021: $70,515.80
  • CPI Dollar Value in 2021: $3,437.32

The formula to calculate inflation-adjusted return is:

Dollar Value of AssetDollar Value of CPI

x 100



x 100

The inflation-adjusted return for the stock market between 1890 and 2021 would be 1,951.47%

How to Calculate Annualized Inflation-Adjusted Return

Annualized inflation-adjusted return is the adjusted rate of return that is stated as an annual rate. This allows the return to be compared between different time periods, such as when the lengths of the time periods being compared are different.

To calculate the annualized inflation-adjusted rate of return, you will need to use the CAGR formula. Using the same example as above for the stock market:

  • $100 in 1890
  • Inflation-Adjusted Return = 1,951.47%
  • Inflation-Adjusted Value = $2,051.47

Annualized Inflation-Adjusted Return = ((2,051.47 / 100)(1 / 131) - 1) x 100%

Annualized Inflation-Adjusted Return = 2.333%

The annualized inflation-adjusted return for the stock market from 1890 to 2021 is 2.333%, excluding dividends.

Inflation Calculator Terms

Stock Market: Based on the S&P, Dow Jones, or NASDAQ Composite indices. S&P is available from 1871, Dow Jones from 1885, and NASDAQ from 1971.

Real Estate: Based on U.S. residential real estate prices

Gold: Based on gold benchmark prices per troy ounce

CPI: Based on the Consumer Price Index for All Urban Consumers (CPI-U)

Cumulative Price Change: The percentage change in prices or value between the start year and the ending year

Inflation-Adjusted Return: The total return of each asset class after accounting for inflation. In other words, how much this asset class outperformed inflation.

Annualized Inflation-Adjusted Return: The total inflation-adjusted return as an annual rate

Inflation-Adjusted Value: The value of the asset in the ending year after accounting for inflation

Daily Inflation Rate: Uses treasury bond yields to estimate the expected inflation for days, rather than the standard monthly calculation based on CPI data

Dividends: Takes into account stock dividends which are reinvested

Inflation Calculator Data Sources

The CPI, residential US real estate, and S&P data is from Robert J. Shiller’s dataset and the S&P CoreLogic Case-Shiller Home Price Indices.

NASDAQ Composite Index data is from the Federal Reserve Bank of St. Louis (FRED).

Dow Jones Industrial Average (DJIA) data is from MeasuringWorth.

Gold benchmark prices are from the National Mining Association and the World Gold Council.

Breakeven inflation rates, which are used for daily inflation data, is from the Federal Reserve Bank of St. Louis (FRED).

Any calculators or content on this page is provided for general information purposes only. Casaplorer does not guarantee the accuracy of information shown and is not responsible for any consequences of its use.