Inflation (CPI-U, annual average change) has averaged roughly 3–4% over the last 50+ years, but the path was anything but smooth. Figures below are rounded annual averages from the Bureau of Labor Statistics.
Buying power of $100 over time (at ~3% average)
| Years ahead | Cost of today’s $100 basket | $100 will buy |
|---|---|---|
| 10 | $134 | $74 worth |
| 20 | $181 | $55 worth |
| 30 | $243 | $41 worth |
| 40 | $326 | $31 worth |
What it means
The Federal Reserve targets 2% inflation. Retirement plans that ignore inflation overstate future wealth dramatically — $1M in 30 years buys what ~$410,000 buys today at 3%.
FAQ
What was the worst U.S. inflation year recently?
1980, at 13.5%. The recent peak was 2022 at 8.0% — the highest since 1981.
Has the U.S. had deflation?
Briefly — 2009 averaged −0.4% during the financial crisis.
What does 3% inflation do over 20 years?
Prices rise ~81%; each dollar loses ~45% of its purchasing power.
Sources
- U.S. Bureau of Labor Statistics, CPI-U annual averages, rounded
Figures compiled and rounded July 2026. Cite this page: “U.S. Inflation Statistics (1970–2025), CalcYard” with a link.