The Consumer Price Index for Urban Consumers (CPI-U) release for December puts the year-over-year inflation rate at 2.89%. The latest reading keeps inflation below the 3.73% average since the end of the Second World War for the 19th straight month. However, inflation now sits just above the 10-year moving average which is now at 2.88%.
- For a comparison of headline inflation with core inflation, which is based on the CPI excluding food and energy, see this monthly update.
- For a better understanding of how CPI is measured and how it impacts your household, see our Inside the Consumer Price Index update.
The Bureau of Labor Statistics (BLS) has compiled CPI data since 1913, and numbers are conveniently available from the FRED repository (here). Our long-term inflation charts reach back to 1872 by adding Warren and Pearson's price index for the earlier years. The spliced series is available at Yale Professor (and Nobel laureate) Robert Shiller's website.
This look further back into the past dramatically illustrates the extreme oscillation and volatility between inflation and deflation during the first 70 years of our timeline. It was after the 1930s' Great Depression that the government became more involved to help smooth out business cycles. As seen below, the economy was no longer suffering collapses (and recessions) as frequently.
For a long-term look at the impact of inflation on the purchasing power of the dollar, check out this log-scale snapshot of fourteen-plus decades and how the value of the dollar has declined.
In other words, $1.00 today has the same buying power as $0.04 in 1872.
