Historical inflation data of the United States
Inflation, by definition, is the measure by which prices rise within a given economy and time period.
As you probably know, generally speaking, prices rise over time, and inflation is our way to measure that price increase over time. This is definitely true for the United States, where prices have raised year over year 63 years from the last 64.
It is important to note that inflation does not cause the increase of prices in the United States, it only serves to measure it.
What causes prices to rise in the United States?
So, if inflation does not cause prices to rise, what does? This is actually a very complicated question with no simple answer. There are a lot of economical factors involved, but if we try to simplify it to the bare minimum, prices rise because there is an imbalance in the supply and demand chain.
This imbalance usually happens in one of two ways:
- If there is a shortage in supply for any given good, people who can afford it will be willing to pay a premium to purchase such good, therefore driving the price up.
- When governments print more money they are basically injecting cash into the economy. Even though it might not seem like it, this money ends up in the pocket of consumers, who now have more money to spend, which increases demand. If supply cannot keep up with the increased demand, we are back to situation 1, and prices rise.
Now let's try to answer some common questions people have about inflation.
Please keep in mind though that our records have inflation data for a 64 year period between 1960 and 2023. It is possible that the United States saw years with higher or lower inflation rates outside of this period.
Which year saw the highest inflation ever in the United States?
In the United States, the year with the highest inflation rate was 1980 which saw an inflation of 13.55%.
Which year saw the lowest inflation ever in the United States?
In the United States, the year with the lowest inflation rate was 2009 which actually saw a negative inflation of -0.36%.
Negative inflation usually happens during periods of difficulty or economical uncertainty, when people either can’t afford to buy things or prefer not to spend and save in anticipation of what could be some rough years ahead.
What is the average inflation rate in the United States?
The average inflation rate in the United States between 1960 and 2023 has been 3.79%.
What inflation rates are considered high in the United States?
Given the historical evolution of inflation rates in the United States, rates above 6.72% can be considered high, and above 9.65% would be very high.
However, if we consider only more recent data, from the last decade, we can see how inflation has been lower than in previous times, and rates above 4.4% could be considered high, while anything above 5.94% being very high.
What inflation rates are considered low in the United States?
Given the historical evolution of inflation rates in the United States, rates below 2.55% can be considered low, and below 1.3% would be very low.
However, if we consider only more recent data, from the last decade, we can see how inflation has been lower than in previous times, this means that in more recent times rates below 2.04% could be considered low, while anything below 1.22% falling into the very low category.
