Inflation Rate in 2021

What happened to inflation in 2021

Reopening demand, stimulus and snarled supply chains pushed inflation to its highest in nearly four decades.

In 2021, inflation ran at 4.70%, up from 1.23% in 2020. That made it the 16th-highest of the 65 years on record, and above the long-run average of 3.76%. For comparison, inflation sits at about 2.95% today.

What 2021's money is worth today

A rate is abstract until it's a price tag. Using the Consumer Price Index, here's what a given sum of 2021 dollars would have to grow to in order to buy the same goods today — the cumulative effect of every year of inflation in between:

Cumulative inflation since 2021 comes to about 16% — prices have risen roughly 1.2× over that span. Put another way, $100 today had the buying power of about $86 in 2021. To run your own figure across any two years, use the inflation calculator.

How 2021 compared

Across the full 1960–2024 record, inflation has averaged about 3.76%, so 2021 ran above that long-run norm. Within the 2020s, inflation averaged roughly 4.2%, and 2021 sat above its own decade. Five years earlier, in 2016, the rate was 1.26%. The following year, 2022, inflation rose to 8.00%.

Inflation shapes borrowing costs: when prices run hot, lenders demand higher rates to compensate. See what mortgage rates did in 2021 for the other side of the same story.

Inflation is only half of the "misery index" — the other half is joblessness. See how unemployment in 2021 compared, and what the two together meant for households.

This is one year out of the whole story. For the complete history — every year since 1960, the all-time high and the deflation low, the decade-by-decade view, and what drives inflation over time — see historical inflation rates, 1960–today.