# Inflation Calculator

This inflation rate calculator uses the official consumer price index (CPI) records published each month by the Bureau of Labor Statistics. Since 1913, inflation has averaged 2.23%, which caused an overall price difference of 2,852.48%.

You can use the form above to calculate inflation for any years from 1913 to 2022 (which is an estimate based on the latest monthly CPI data from the BLS).

## What is Inflation?

The inflation rate is the percentage increase in the average level of prices of a basket of selected goods over time. It indicates a decrease in the purchasing power of currency and results in an increased consumer price index (CPI). Put simply, the inflation rate is the rate at which the general prices of consumer goods increases when the currency purchase power is falling.

The current inflation rate for 2022 is 8.58% and if that number holds until next year, $100 would be equivalent to$108.58 in 2023.

Inflation from 1913 to 2022
Average inflation rate 2.23%
Cumulative price change 2.23%
Price difference ($100 base)$2,852.48
CPI in 1913 9.9
CPI in 2022 292.296

## USD Inflation Since 1913

The chart below shows the inflation rate from 1913 when the Bureau of Labor Statistics' Consumer Price Index (CPI) was first established.

Purchasing power is when you compare the value of currency between different years. The Consumer Price Index directly measures this against a basket of goods, and we can use that data to calculate how much the purchasing power of a dollar decreases over time.

Inflation and purchasing power are linked because as inflation takes place, the purchasing power of the dollar decreases. If deflation happens, then the purchasing power of the dollar increases.

In the chart below you can see how the value of the dollar is worth less over the 109 years from 1913 to 2022.

## Inflation Formula Example

Using the inflation rate formula, we can calculate all of the data used in this article, or for any years, to see the impact of inflation and purchasing power.

To calculate the inflation rate of $100 from 1913 to 2022, we use the following formula: $$\dfrac{ 1913\; USD\; value \times CPI\; in\; 2022 }{ CPI\; in\; 1913 } = 2022\; USD\; value$$ We then replace the variables with the historical CPI values. The CPI in 1913 was 9.9 and 292.296 in 2022. $$\dfrac{ \100 \times 292.296 }{ 9.9 } = \text{ \2,952.48 }$$$100 in 1913 has the same purchasing power as \$2,952.48 today.

To work out the total inflation rate for the 109 years between 1913 and 2022, we can use a different formula:

$$\dfrac{\text{CPI in 2022 } - \text{ CPI in 1913 } }{\text{CPI in 1913 }} \times 100 = \text{Cumulative rate for 109 years}$$

Again, we can replace those variables with the correct Consumer Price Index values to work out the cumulativate rate:

$$\dfrac{\text{ 292.296 } - \text{ 9.9 } }{\text{ 9.9 }} \times 100 = \text{ 2,852.48\% }$$

### What is inflation?

The inflation rate is the percentage increase in the average level of prices of a basket of selected goods over time. It indicates a decrease in the purchasing power of currency and results in an increased consumer price index (CPI).

### How does inflation affect the economy?

Inflation affects the economy by decreasing the purchasing power of the currency. This can lead to decreased economic growth, as consumers and businesses have less money to spend. Another outcome of high inflation rates is hyperinflation, which can cause a complete economic meltdown.

### Is inflation a bad thing?

That depends on your perspective. From a consumer point of view, inflation is bad because it erodes the value of their money. Businesses may see inflation as a sign that the economy is healthy and growing, as increased prices usually means increased demand.

### What causes inflation?

Inflation can be caused by a number of factors, including an increase in the money supply, rising costs of goods and services, or increased taxes. Let's say the cost to produce widgets doubles. If the widget company doesn't raise their prices, they will eventually go out of business. This will lead to an increase in the cost of widgets, and thus inflation.

### How can I protect my money from inflation?

The easiest way to protect your money from inflation is to invest it in assets that will maintain or increase their value over time. This could include stocks, property, or even gold. Another option is to keep your money in a savings account, where the interest rate will typically outpace the rate of inflation.