With inflation in the United States running at its highest levels in some four decades, Pew Research Center decided to compare the U.S. experience with those of other countries, especially its peers in the developed world. An earlier version of this post was published in November 2021.
For each country, we calculated year-over-year inflation rates going back to the first quarter of 2010 and ending in the first quarter of this year. We also calculated how much those rates had risen or fallen since the start of the COVID-19 pandemic in the first quarter of 2020.
To get a sense of longer-term inflation trends in the U.S., we analyzed two measures besides the commonly cited consumer price index: The Consumer Price Index Retroactive Series (R-CPI-U-RS) from the Bureau of Labor Statistics, and the Personal Consumption Expenditures Price Index from the Bureau of Economic Analysis.
But the U.S. is hardly the only place where people are experiencing inflationary whiplash. A Pew Research Center analysis of data from 44 advanced economies finds that, in nearly all of them, consumer prices have risen substantially since pre-pandemic times.
In 37 of these 44 nations, the average annual inflation rate in the first quarter of this year was at least twice what it was in the first quarter of 2020, as COVID-19 was beginning its deadly spread. In 16 countries, first-quarter inflation was more than four times the level of two years prior. (For this analysis, we used data from the Organization for Economic Cooperation and Development, a group of mostly highly developed, democratic countries. The data covers 37 of the 38 OECD member nations, plus seven other economically significant countries.)
Among the countries studied, Turkey had by far the highest inflation rate in the first quarter of 2022: an eye-opening 54.8%. Turkey has experienced high inflation for years, but it shot up in late 2021 as the government pursued unorthodox economic policies, such as cutting interest rates rather than raising them.
Regardless of the absolute level of inflation in each country, most show variations on the same basic pattern: relatively low levels before the COVID-19 pandemic struck in the first quarter of 2020; flat or falling rates for the rest of that year and into 2021, as many governments sharply curtailed most economic activity; and rising rates starting in mid- to late 2021, as the world struggled to get back to something approaching normal.
The annual inflation rate for the United States was 6.0% for the 12 months ended February, following a rise of 6.4% in the previous period, according to U.S. Labor Department data published March 14, 2023. The next inflation update is scheduled for release on April 12 at 8:30 a.m. ET, and it will provide information on the rate of inflation over the 12 months ended March 2023.
Below is a chart and table displaying annual US inflation rates for calendar years from 2000 and 2013 to 2023. For inflation rates in prior years, please refer to historical inflation rates. If you would like to calculate the accumulated rates between two different dates, you can use the US Inflation Calculator.
To find anuual inflation rates for a calendar year, look to the December column. For instance, the inflation rate in 2022 was 6.5%. Meanwhile, the "Ave" column shows the average inflation rate for each year using CPI data. In 2022, the average inflation rate was 8.0%. These average rates are published by the BLS but are rarely discussed in the news media, taking a back seat to the actual rate of inflation for a given calendar year.
To calculate the inflation rate for a specific month, such as January 2017, subtract the CPI for that month of the previous year (in this case, January 2016) from the current CPI (January 2017). The result is the difference between the two CPIs. Divide this number by the CPI for the previous year, then multiply by 100 and add a percentage sign to obtain the inflation rate for the given month.
For example, to calculate the inflation rate for January 2017, subtract the January 2016 CPI of 236.916 from the January 2017 CPI of 242.839, which yields 5.923. Divide 5.923 by 236.916, multiply by 100, and add a % sign to obtain an inflation rate of 2.5% for January 2017.
The following chart displays both the monthly inflation rates alongside the 12-month inflation rates since January 2013. The latter rates are the same as above and are not seasonally adjusted, while the former are seasonally adjusted. Both of these rates are headline figures in monthly Labor Department reports on consumer prices and inflation. For further details on the differences between seasonally adjusted and unadjusted data, please refer to "Seasonally Adjusted and Unadjusted Data."
Series I savings bonds protect you from inflation. With an I bond, you earn both a fixed rate of interest and a rate that changes with inflation. Twice a year, we set the inflation rate for the next 6 months.
Inflation can be defined as the overall general upward price movement of goods and services in an economy. The U.S. Department of Labor's Bureau of Labor Statistics has various indexes that measure different aspects of inflation.
How to Use the Consumer Price Index for EscalationEscalation agreements often use the CPI to adjust payments for changes in prices. The most frequently used escalation applications are in private sector collective bargaining agreements, rental contracts, insurance policies with automatic inflation protection, and alimony and child support payments.
Every household has different spending habits: some have a car and eat meat, others travel solely by public transport or are vegetarian. The average spending habits of all households together determine how much weight the different products and services have in the measurement of inflation.
* Consumer price inflation in the euro area is calculated every month by Eurostat. The Harmonised Index of Consumer Prices (HICP) covers, on average, around 700 goods and services. It reflects average household expenditure in the euro area for a basket of products. Full product range covered by the HICP and current inflation rates.
Before the euro became our common currency, each country measured inflation using its own national methods and procedures. The introduction of the euro made it necessary to have a means of measuring inflation for the entire euro area, without gaps or overlaps and in a way that could be compared across countries. The HICP, supported by a set of legally binding standards, does precisely this.
Example: car prices may have gone up but new models often include, as standard, features that were previously sold as optional extras (for example, satellite navigation systems, air conditioning and airbags). In such cases, the price increase is due partly to an increase in quality and not only to inflation. If car prices went up, say, 5% on average but quality increases accounted for 1%, then the HICP would reflect a 4% increase for this product.
In the 1970s and 1980s inflation was high in many European countries. But since the mid-1990s, inflation rates have been markedly lower thanks to countries preparing for the launch of the euro and to the monetary policy of the ECB.
Check out the latest data and historical data going back to 1996. Take a look at individual countries and drill down into individual product groups. When you select a timeline, the development of inflation over time will be shown in an animation, month after month.
As a bonus, Inflation also explains the origin of structure in the universe. Prior to inflation, the portion of the universe we can observe today was microscopic, and quantum fluctuation in the density of matter on these microscopic scales expanded to astronomical scales during Inflation. Over the next several hundred million years, the higher density regions condensed into stars, galaxies, and clusters of galaxies.
A measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services. The PCE price index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior.
"The inflation trend looks promising for investors. Inflation will likely be below 4% by the end of the year, giving the Federal Reserve some leeway to cut rates by the end of the year if the economy falls into recession," said Jeffrey Roach, chief economist at LPL Financial.
While inflation has ebbed in some areas, it has remained pernicious in others. Shelter costs in particular have risen sharply. Fed officials, though, are looking through that increase and expect rents to decelerate through the year.
The ongoing price increases underscore the brutal impact that inflation has inflicted on many families, with the costs of necessities, in particular, rising much faster than average incomes. Lower-income and Black and Hispanic Americans have been hit especially hard, because a disproportionate share of their income goes toward such essentials as housing, transportation and food.
The persistence of high inflation has unnerved Chair Jerome Powell and other Fed officials, who are engaged in the fastest series of rate hikes since the late 1980s to try to slow the price spikes. The central bank is expected to raise its key short-term rate later this month by a hefty three-quarters of a point, as it did last month, with potentially more large rate hikes to follow.
Inflation is the increase in the prices of goods and services over time. Inflation cannot be measured by an increase in the cost of one product or service, or even several products or services. Rather, inflation is a general increase in the overall price level of the goods and services in the economy.
Federal Reserve policymakers evaluate changes in inflation by monitoring several different price indexes. A price index measures changes in the price of a group of goods and services. The Fed considers several price indexes because different indexes track different products and services, and because indexes are calculated differently. Therefore, various indexes can send diverse signals about inflation. 041b061a72