Inflation is the rate at which the general level of prices for goods and services rises over time, reducing purchasing power. If inflation is 3% per year, something that costs $100 today will cost $103 next year. The US Bureau of Labor Statistics measures inflation using the Consumer Price Index (CPI).

How is inflation calculated?

Inflation is measured using the Consumer Price Index (CPI). The inflation rate between two years = ((CPI in later year - CPI in earlier year) / CPI in earlier year) × 100. For example, if CPI was 100 in 2000 and 150 in 2020, inflation over that period was 50%.

What was $100 in 1990 worth today?

$100 in 1990 has the same purchasing power as approximately $240 in 2025, based on US CPI data. This means prices have roughly 2.4x'd over 35 years, representing cumulative inflation of about 140% and an average annual inflation rate of approximately 2.6%.

What is the average US inflation rate?

The average US inflation rate from 1913 to 2025 is approximately 3.1% per year. However, inflation varies significantly: it was very high in the 1970s-80s (10-14%), very low in the 2010s (1-2%), and spiked to 7-9% in 2021-2022 before moderating to 3-4% in 2023-2025.

✦ US CPI Data · 1913–2025

Inflation Calculator

Calculate how inflation changes purchasing power over time. Find out what money from any year is worth today — or what today's dollars were worth in the past.

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What Is Inflation?

Inflation is the rate at which prices for goods and services rise over time, reducing the purchasing power of money. It's measured using the Consumer Price Index (CPI), which tracks the average price change for a basket of consumer goods.

The US Bureau of Labor Statistics (BLS) has published CPI data since 1913. Moderate inflation (2-3% per year) is considered normal and healthy for an economy. High inflation (above 5-6%) erodes savings and wages. Deflation (negative inflation) can signal economic recession. The Federal Reserve targets 2% annual inflation as its long-term goal.

How Does Inflation Affect Savings?

Inflation erodes purchasing power — if your savings earn less than the inflation rate, you're losing money in real terms. A savings account earning 2% when inflation is 3% has a real return of -1%.

Over 30 years at 3% average inflation, $100 loses about 59% of its purchasing power — meaning you'd need $243 to buy what $100 bought 30 years ago. This is why financial planning should always account for inflation, and why investments that outpace inflation (stocks, real estate, inflation-protected bonds) are essential for long-term wealth preservation.

What Causes Inflation?

Inflation is primarily caused by demand-pull factors (too much money chasing too few goods), cost-push factors (rising production costs), and monetary policy (money supply expansion).

Demand-pull inflation occurs during economic booms when consumer spending outpaces production capacity. Cost-push inflation results from rising raw material costs, supply chain disruptions, or energy price spikes. Central banks influence inflation through interest rates and money supply — lower rates encourage spending (inflationary), higher rates encourage saving (deflationary).

Important Notes: (1) This calculator uses US CPI-U data only (Bureau of Labor Statistics, 1913–2025). Values do not apply to other countries — inflation rates in the EU, Romania, UK, or other regions differ significantly. (2) CPI data must be updated annually — the most recent year (2025) may use preliminary estimates. (3) CPI measures national average price changes and may not reflect your personal experience, which varies by location, spending habits, and lifestyle.