Historical US Inflation Rate, 1960–2024

Sixty years of US inflation at a glance

The chart above plots the annual US inflation rate from 1960 to today, using the Consumer Price Index — the standard measure that tracks the cost of the goods and services households actually buy. The shape tells the whole story: a calm, low-inflation stretch through most of the 1960s; a violent climb to the 13.55% peak of the Great Inflation in 1980; a long, mostly quiet descent through the 1990s, 2000s and 2010s; and the sharp 2021–2022 spike that ended the calm. Today's 2.95% sits close to the 3.76% that inflation has averaged over the entire period.

The peak: 13.55% in 1980

The record sits at 13.55%, reached in 1980. It was the climax of what economists call the Great Inflation. Through the 1970s, two oil shocks — the 1973 OPEC embargo and the 1979 disruption after the Iranian Revolution — sent energy prices soaring, while years of loose monetary policy let those increases feed into wages and prices across the economy. By 1980 inflation was running in the mid-teens.

Breaking it took brutal medicine. The Federal Reserve under Paul Volcker pushed its benchmark interest rate to record highs, deliberately tipping the economy into recession to wring inflation out. Inflation is the single biggest driver of mortgage rates, and the Fed's response sent mortgage rates to their own all-time high — nearly 19% — at the same time. By the mid-1980s, prices had cooled and the long disinflation had begun.

The deflation of 2009

At the other extreme, 2009 is the only year in this record when prices actually fell: inflation came in at -0.36%. That is deflation — the general price level dropping rather than rising. It happened in the depths of the global financial crisis, as collapsing demand and a sharp reversal in energy prices (after the 2008 oil spike) dragged the index down. The episode was mild and short-lived, nothing like the sustained deflation of the 1930s, but economists watch deflation closely: when people expect prices to keep falling, they delay spending, which can deepen a downturn.

The 2021–2022 spike

After a decade of unusually quiet inflation, prices surged. Inflation jumped to 4.7% in 2021 and 8% in 2022 — a roughly 40-year high. Several forces hit at once: the economy reopening after the pandemic, large fiscal stimulus boosting demand, global supply chains still snarled, and a fresh surge in energy prices after Russia's invasion of Ukraine. The Federal Reserve responded with its fastest run of interest-rate hikes in decades, and inflation cooled to 4.12% in 2023 and 2.95% in 2024.

What inflation does to your money

Inflation matters because it quietly erodes purchasing power — the same dollar buys a little less each year. Compounded over decades, the effect is dramatic. Using the CPI, $100 in 1960 buys what about $1,061 buys today. Put another way, more than 90% of a 1960 dollar's purchasing power has been worn away. That is why even "low" inflation matters for savers and retirees, and why returns are usually judged after inflation. To see what any amount in one year is worth in another, use the inflation calculator.

How inflation moved, decade by decade

Zooming out hides the texture, so here is the same history broken into decades. Each panel below charts the annual inflation rate across those ten years, with the decade's own high and low marked. It's the clearest way to see how different each era felt — the placid early 1960s, the relentless climb of the 1970s, the steady cooling of the 1980s and 1990s, the near-flat 2010s, and the sharp spike that closed out the most recent stretch.