U.S. Inflation Rate by Year: 1929 - 2018

The U.S. inflation rate by year is the percent change in prices from one year to the next, or year-over-year.  It changes with each phase of the business cycle. The first phase is expansion. That's when growth is positive, with healthy 2 percent inflation. As the economy expands beyond 3 percent, it creates asset bubbles. The second phase is the peak. That's the month when expansion ends and contraction begins.

 The third phase is contraction, which is a recession. Inflation falls below 2.0 percent. Soon, deflation becomes a threat. The fourth phase is the trough. That's the month when contraction ends and expansion begins.

Inflation also responds to monetary policy enacted by the Federal Reserve. The Fed focuses on the core inflation rate because it excludes volatile gas and food prices. The Fed sets a target inflation rate of two percent. If the core rate rises much above that, the Fed will execute contractionary monetary policy. This increases interest rates, shutting down demand and forcing prices lower.

U.S. Inflation Rate History and Forecast

The table below compares the inflation rate with the fed funds rate, the phase of the business cycle and major events influencing inflation. For more about the forecast, see U.S. Economic Outlook.

Year	Inflation Rate YOY	Fed Funds Rate	Business Cycle (GDP Growth)	Events Affecting Inflation
1929	0.6%	NA	Aug peak	Market crash
1930	-6.4%	NA	Contraction (-8.5%)	Smoot-Hawley
1931	-9.3%	NA	Contraction (-6.4%)	Dust Bowl
1932	-10.3%	NA	Contraction (-12.9%)	Hoover tax hikes
1933	0.8%	NA	Contraction ended in March. (-1.3%)	FDR's New Deal
1934	1.5%	NA	Expansion (10.8%)	U.S. debt rose
1935	3.0%	NA	Expansion (8.9%)	Social Security
1936	1.4%	NA	Expansion (12.9%)	FDR tax hikes
1937	2.9%	NA	Expansion peaked in May (5.1%)	Depression resumes
1938	-2.8%	NA	Contraction ended in June (-3.3%)	Depression ended
1939	0.0%	NA	Expansion (8.0%)	Dust Bowl ended
1940	0.7%	NA	Expansion (8.8%)	Defense increased
1941	9.9%	NA	Expansion (17.7%)	Pearl Harbor
1942	9.0%	NA	Expansion (18.9%)	Defense spending tripled
1943	3.0%	NA	Expansion (17.0%)
1944	2.3%	NA	Expansion (8.0%)	Bretton-Woods
1945	2.2%	NA	Feb peak.Oct trough (-1.0%)	Truman ended WWII
1946	18.1%	NA	Expansion (-11.3%)	Budget cuts
1947	8.8%	NA	Expansion (-1.1%)	Marshall Plan.Truman Doctrine. Cold War
1948	3.0%	NA	Nov peak (4.1%)
1949	-2.1%	NA	Oct trough (-0.5%)	Fair Deal. NATO
1950	5.9%	NA	Expansion (8.7%)	Korean War
1951	6.0%	NA	Expansion (8.1%)
1952	0.8%	NA	Expansion (4.1%)
1953	0.7%	NA	July peak (4.7%)	Eisenhower ended Korean War
1954	-0.7%	1.25%	May trough (-0.6%)	Dow returned to 1929 high
1955	0.4%	2.50%	Expansion (7.1%)
1956	3.0%	3.00%	Expansion (2.1%)
1957	2.9%	3.00%	Aug peak (2.1%)	Recession
1958	1.8%	2.50%	April trough (-0.7%)	Recession ended
1959	1.7%	4.00%	Expansion (6.9%)	Fed raised rates
1960	1.4%	2.00%	April peak (2.6%)	Recession
1961	0.7%	2.00%	Feb trough (2.6%)	JFK's deficit spending ended recession
1962	1.3%	3.00%	Expansion (6.1%)
1963	1.6%	3.38%	Expansion (4.4%)
1964	1.0%	3.75%	Expansion (5.8%)	LBJ's Medicare, Medicaid
1965	1.9%	4.25%	Expansion (6.5%)
1966	3.5%	5.50%	Expansion (6.6%)	Vietnam War
1967	3.0%	4.50%	Expansion (2.7%)
1968	4.7%	6.00%	Expansion (4.9%)	Moon landing
1969	6.2%	9.00%	Dec peak (3.1%)	Nixon took office
1970	5.6%	5.00%	Nov trough (0.2%)	Recession
1971	3.3%	5.00%	Expansion (3.3%)	Wage-price controls
1972	3.4%	5.75%	Expansion (5.2%)	Stagflation
1973	8.7%	11.00%	Nov peak (5.6%)	End of gold standard
1974	12.3%	8.00%	Contraction (-0.5%)	Watergate
1975	6.9%	6.50%	March trough (-0.2%)	Stop-gap monetary policy. Fed raised rates to fight inflation, then lowered them to fight recession. Confused businesses kept prices high.
1976	4.9%	4.75%	Expansion (5.4%)
1977	6.7%	6.50%	Expansion (4.6%)
1978	9.0%	10.00%	Expansion (5.6%)
1979	13.3%	12.00%	Expansion (3.2%)
1980	12.5%	18.00%	Jan peak (0.2%)	Recession
1981	8.9%	12.00%	July trough (2.6%)	Reagan tax cut
1982	3.8%	8.50%	November (-1.9%)	Recession ended
1983	3.8%	9.25%	Expansion (4.6%)	Reagan increased military spending
1984	3.9%	8.25%	Expansion (7.3%)
1985	3.8%	7.75%	Expansion (4.2%)
1986	1.1%	6.00%	Expansion (3.5%)	Tax cut
1987	4.4%	6.75%	Expansion (3.5%)	Black Monday crash
1988	4.4%	9.75%	Expansion (4.2%)	Fed raised rates
1989	4.6%	8.25%	Expansion (3.7%)	S&L Crisis
1990	6.1%	7.00%	Jul peak (1.9%)	Recession
1991	3.1%	4.00%	Mar trough (-0.1%)	Fed lowered rate
1992	2.9%	3.00%	Expansion (3.6%)	NAFTA drafted
1993	2.7%	3.00%	Expansion (2.7%)	Balanced Budget Act
1994	2.7%	5.50%	Expansion (4.0%)
1995	2.5%	5.50%	Expansion (2.7%)
1996	3.3%	5.25%	Expansion (3.8%)	Welfare reform
1997	1.7%	5.50%	Expansion (4.5%)	Fed raised rate
1998	1.6%	4.75%	Expansion (4.5%)	LTCM crisis
1999	2.7%	5.50%	Expansion (4.7%)	Glass-Steagall repealed
2000	3.4%	6.50%	Expansion (4.1%)	Tech bubble burst
2001	1.6%	1.75%	March peak. Nov trough. (1.0%)	Bush tax cut. 9/11 attacks
2002	2.4%	1.25%	Expansion (1.8%)	War on Terror
2003	1.9%	1.00%	Expansion (2.8%)	JGTRRA
2004	3.3%	2.25%	Expansion (3.8%)
2005	3.4%	4.25%	Expansion (3.3%)	Katrina. Bankruptcy Act
2006	2.5%	5.25%	Expansion (2.7%)	Bernanke is Fed Chair
2007	4.1%	4.25%	Dec peak (1.8%)	Bank crisis
2008	0.1%	0%	Contraction (-.3%)	Financial crisis
2009	2.7%	0%	Jun trough (2.8%)	ARRA
2010	1.5%	0%	Expansion (2.5%)	ACA. Dodd-Frank
2011	3.0%	0%	Expansion (1.6%)	Debt ceiling crisis
2012	1.7%	0%	Expansion (2.2%)
2013	1.5%	0%	Expansion (1.7%)	Government shutdown. Sequestration
2014	0.8%	0%	Expansion (2.4%)	QE ends
2015	0.7%	.25%	Expansion (2.6%)	Deflation in oil and gas prices
2016	2.1%	.75%	Expansion (1.6%)
2017	1.6%	1.4%	Forecast. Core inflation rate 1.7%. The current rate is updated monthly.
2018	2.0%	2.1%	Forecast. Core rate 2.0 %
2019	2.0%	2.9%	Forecast. Core rate 2.0%

 

Resources for Table

• BLS, Historical Inflation Rate
• U.S. Census Bureau, Percent of Population That Is Unemployed 1929-1947 Note: This divides the number of people age 14 and over without jobs into the total civilian population.
• BLS, Unemployment Rate 1948-2015 Note: This divides the number of unemployed who are actively looking for work into the labor force.