Convert the purchasing power of the U.S. dollar between any two years from 1913 to 2024 using historical CPI data, or use the forward and backward flat-rate calculators for theoretical scenarios.
Calculates the equivalent value of the U.S. dollar in any month from 1913 to 2024 based on historical Consumer Price Index (CPI) data.
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Calculates inflation based on a fixed average inflation rate after some years.
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Calculates the equivalent purchasing power of an amount some years ago based on a fixed average inflation rate.
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Inflation is a general increase in the prices of goods and services over time, which reduces the purchasing power of money. When inflation rises, each unit of currency buys fewer goods and services than before. The inflation rate is usually expressed as a percentage change in prices over a 12-month period.
Most developed nations aim to keep inflation around 2–3% per year through monetary and fiscal policy. Moderate inflation is considered healthy because it encourages spending and investment rather than hoarding cash.
Hyperinflation is excessive, rapidly accelerating inflation that erodes the real value of a currency. It typically occurs when the money supply grows dramatically without a corresponding increase in economic output. Historical examples include:
Deflation is the opposite of inflation — a general decline in prices. While lower prices sound good, deflation can be dangerous: consumers postpone spending in anticipation of even lower prices, which reduces demand, profits, and employment, creating a downward spiral. The Great Depression of the 1930s is a classic example.
Economists generally identify three main types of inflation:
Monetarists, led by Milton Friedman, argue that inflation is primarily driven by growth in the money supply. Their framework is based on the Equation of Exchange:
where M = money supply, V = velocity of money, P = price level, and Y = real economic output.
Assuming V and Y are relatively stable, changes in the money supply (M) directly affect the price level (P). This is the Quantity Theory of Money.
In the U.S., the Bureau of Labor Statistics (BLS) publishes the Consumer Price Index (CPI) each month. The CPI tracks the average price change of a basket of goods and services that a typical urban consumer purchases.
Example: Suppose the CPI was 236.916 in January 2016 and 242.839 in January 2017.
Difference = 242.839 − 236.916 = 5.923
Inflation rate = (5.923 ÷ 236.916) × 100 ≈ 2.5%
Inflation erodes the value of idle cash. If you keep $50,000 in a non-interest-bearing account during a period of 2.5% inflation, you effectively lose $1,250 in purchasing power. To protect against inflation, consider:
There is no perfect hedge against inflation. Most investors combine several asset classes to manage risk while preserving long-term purchasing power.
CPI (Consumer Price Index) is a measure of the average change in prices paid by urban consumers for a basket of goods and services. The inflation rate is the percentage change in the CPI over a period of time. In other words, CPI is the data; inflation is the rate derived from that data.
The Bureau of Labor Statistics collects price data from thousands of retail outlets, service establishments, and rental units across the country each month. Processing and verifying this volume of data takes time, so the CPI is typically released about 2–3 weeks after the end of each month.
Most central banks target an inflation rate of around 2% per year. This is considered low enough to preserve purchasing power and high enough to encourage spending and investment without causing economic instability. Rates between 2% and 3% are generally considered healthy.
The highest inflation rate recorded in the U.S. was in 1917–1920, peaking around 20% per year during World War I. More recently, inflation peaked at 9.1% in June 2022, the highest since 1981.
Deflation is often considered more dangerous than moderate inflation because it can trigger a downward spiral: falling prices lead to lower profits, lower wages, reduced spending, and further price declines. The Great Depression is a prominent example of how destructive deflation can be.
The U.S. Bureau of Labor Statistics' CPI data begins in 1913. Our calculator uses the official BLS CPI-U series for all years from 1913 onward. For earlier periods, historical estimates exist but are not part of the official CPI series.
The calculator uses non-seasonally adjusted CPI-U data, which is the standard series used for indexing purposes (such as adjusting Social Security benefits and tax brackets).