Inflation Calculator

The US long-term CPI average since 1913 is about 3.2% per year, which is the calculator's default. Recent decades have run closer to 2-3%, so if you want a more conservative forecast use 2.5%. For a stress-test, try 5-6% to see how rising prices could erode your purchasing power faster.

2% is a deliberate middle ground: low enough to keep prices predictable for households and businesses, but high enough to avoid deflation. Deflation causes consumers to delay purchases and can trigger recessions, and it also gives the Fed room to cut interest rates when the economy slows.

Economist Phillip Cagan defined hyperinflation as inflation exceeding 50% per month, the threshold economists still use. At that pace, prices double in under two months. Historical examples include Weimar Germany in 1923, Zimbabwe in 2008, and Venezuela in 2018, where currencies lost most of their value within weeks and savings were wiped out.

Divide 72 by the annual inflation rate to get the approximate number of years it takes for prices to double. At the default rate of 3.2%, prices double in about 22.5 years. At 6%, they double in 12 years. The calculator uses the exact compound formula, so use the Rule of 72 as a quick mental check.

The Bureau of Labor Statistics (BLS) publishes the Consumer Price Index (CPI), which tracks the price of a fixed basket of goods and services covering housing, food, transportation, medical care, and more. The most widely cited version is CPI-U (all urban consumers). The BLS releases new CPI data monthly.