Inflation is one of the few financial topics where the numbers are openly published and verifiable. The U.S. Bureau of Labor Statistics (BLS) releases the Consumer Price Index (CPI) every month, and from it we can state exactly how much prices rose in any given year. The figures below are real reported data — not forecasts.

Annual Average CPI Inflation, Recent Years (BLS)

These are the BLS annual average inflation rates for the U.S. city average (all items, CPI-U), the same series tracked by the Federal Reserve Economic Data (FRED) database:

  • •**2021:** +4.7%
  • •**2022:** +8.0% (the 12-month rate peaked at 9.1% in June 2022 — the highest since 1981)
  • •**2023:** +4.1%
  • •**2024:** +2.9%
  • •**2025:** +2.6%

Source: U.S. Bureau of Labor Statistics, CPI-U annual averages (also tabulated by the Federal Reserve Bank of Minneapolis inflation calculator and usinflationcalculator.com from BLS data). The 2022 jump reflects the post-pandemic inflation surge; the 9.1% June 2022 peak is the BLS monthly 12-month figure.

The Long-Run Average Since 1913

The BLS CPI series begins in 1913. From an index level of 9.9 in 1913 to about 313.7 in 2024, prices have risen roughly 32-fold. That works out to an average inflation rate of about **3.2% per year** over more than a century. In plain terms: a dollar in 1913 has the purchasing power of about $32 today.

How to Adjust a Dollar for Inflation

To find what a future amount is worth in today's purchasing power, divide by compounding:

Real Value = Nominal / (1 + inflation)^years

  • •At the long-run 3.2% rate, $100,000 today is worth about $53,600 in real terms after 20 years (100000 / 1.032^20).
  • •At the 2022 pace of 8%, the same $100,000 would lose roughly 7.4% of its purchasing power in a single year (100000 / 1.08 ≈ $92,600).

Try it yourself with our inflation calculator.

Why This Matters for Saving and Investing

Practical steps

  1. Always compare a return to inflation. A 5% APY with 3% inflation is only ~2% real growth.
  2. Use the long-run ~3.2% as a planning baseline, not a guarantee for any single year.
  3. For goals more than 10 years out, subtract an inflation assumption from your nominal return to see real purchasing power.
  4. Prefer tax-advantaged accounts so taxes do not compound on top of inflation.

Important: future inflation is unknown. The historical averages above are facts about the past; they are not a prediction of what prices will do next year. Plan conservatively and review periodically.

<strong>Disclaimer:</strong> The content provided on CompoundFig is for educational and informational purposes only and does not constitute financial, tax, legal, or investment advice. All calculations and projections are hypothetical and based on assumed rates of return, which may not reflect actual market conditions. Historical figures cited here are factual records, not forecasts or guarantees of future performance. Individual results will vary. Consult a qualified financial professional before making decisions. CompoundFig does not provide personalized financial recommendations.

Sources & References