$1 in 2005 → $1.10 in 2008

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$1 in 2005 → $1.10 in 2008

U.S. Inflation Rate, $1 in 2005 to 2008

According to the Bureau of Labor Statistics consumer price index, prices in 2008 are 10.24% higher than average prices throughout 2005. The dollar experienced an average inflation rate of 3.30% per year during this period, meaning the real value of a dollar decreased.

In other words, $1 in 2005 is equivalent in purchasing power to about $1.10 in 2008, a difference of $0.10 over 3 years.

The 2005 inflation rate was 3.39%. The inflation rate in 2008 was 3.84%. The 2008 inflation rate is higher compared to the average inflation rate of 1.59% per year between 2008 and 2019.


Inflation from 2005 to 2008
Cumulative price change 10.24%
Average inflation rate 3.30%
Converted amount ($1 base) $1.10
Price difference ($1 base) $0.10
CPI in 2005 195.300
CPI in 2008 215.303
Inflation in 2005 3.39%
Inflation in 2008 3.84%

USD Inflation since 1913
Annual Rate, U.S. Bureau of Labor Statistics CPI
Download

Buying power of $1 in 2005

This chart shows calculation of buying power equivalence, often referred to as "the value of a dollar" over time for $1 in 2005 (price index tracking began in 1635).

According to the Bureau of Labor Statistics, each of these USD amounts below is equal in terms of what it could buy at the time:

Year Dollar Value Inflation Rate
2005 $1.00 3.39%
2006 $1.03 3.23%
2007 $1.06 2.85%
2008 $1.10 3.84%
2009 $1.10 -0.36%
2010 $1.12 1.64%
2011 $1.15 3.16%
2012 $1.18 2.07%
2013 $1.19 1.46%
2014 $1.21 1.62%
2015 $1.21 0.12%
2016 $1.23 1.26%
2017 $1.26 2.13%
2018 $1.29 2.44%
2019 $1.31 1.99%*
* Compared to previous annual rate. Not final. See inflation summary for latest 12-month trailing value.

Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 2005 to 2008 (figures shown are purchasing power equivalents of $1):

Miami-Fort Lauderdale, Florida experienced the highest rate of inflation during the 3 years between 2005 and 2008 (4.61%).

St Louis, Missouri experienced the lowest rate of inflation during the 3 years between 2005 and 2008 (2.19%).

Note that some locations showing 0% inflation may have not yet reported latest data.


Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £1.00 in 2005 would be equivalent to £1.12 in 2008, an absolute change of £0.12 and a cumulative change of 11.91%.

In Canada, CA$1.00 in 2005 would be equivalent to CA$1.05 in 2008, an absolute change of CA$0.05 and a cumulative change of 5.30%.

Compare these numbers to the US's overall absolute change of $0.10 and total percent change of 10.24%.


Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. This chart shows the average rate of inflation for select CPI categories between 2005 and 2008.

Compare these values to the overall average of 3.30% per year:

Category Avg Inflation (%) Total Inflation (%) $1 in 2005 → 2008
Food 3.93 12.26 1.12
Shelter 3.20 9.91 1.10
Energy 10.07 33.37 1.33
Apparel -0.18 -0.53 0.99
New vehicles -0.91 -2.71 0.97
Used cars and trucks -1.33 -3.93 0.96
Transportation services 2.65 8.16 1.08
Medical care services 4.57 14.34 1.14
Medical care commodities 2.36 7.26 1.07

It's important to note that not all categories may be tracked since 2005. This table and visualization use the earliest available data for each category.



How to Calculate Inflation Rate for $1, 2005 to 2008

This inflation calculator uses the following inflation rate formula:

CPI in 2008CPI in 2005
×
2005 USD value
=
2008 USD value

Then plug in historical CPI values. The U.S. CPI was 195.3 in the year 2005 and 215.303 in 2008:

215.303195.3
×
$1
=
$1.10

$1 in 2005 has the same "purchasing power" or "buying power" as $1.10 in 2008.

To get the total inflation rate for the 3 years between 2005 and 2008, we use the following formula:

CPI in 2008 - CPI in 2005CPI in 2005
×
100
=
Cumulative inflation rate (3 years)

Plugging in the values to this equation, we get:

215.303 - 195.3195.3
×
100
=
10%

Alternate Measurements of Inflation

The above data describe the CPI for all items. Also of note is the Core CPI, which measures inflation for all items except for the more volatile categories of food and energy. Core inflation averaged 2.38% per year between 2005 and 2008 (vs all-CPI inflation of 3.30%), for an inflation total of 7.31%.

When using the core inflation measurement, $1 in 2005 is equivalent in buying power to $1.07 in 2008, a difference of $0.07. Recall that for All Items, the converted amount is $1.10 with a difference of $0.10.

In 2005, core inflation was 2.17%.

Chained CPI is an alternative measurement that takes into account how consumers adjust spending for similar items. Chained inflation averaged 3.05% per year between 2005 and 2008, a total inflation amount of 7.31%.

According to the Chained CPI measurement, $1 in 2005 is equal in buying power to $1.09 in 2008, a difference of $0.09 (versus a converted amount of $1.10/change of $0.10 for All Items).

In 2005, chained inflation was 2.92%.


Comparison to S&P 500 Index

The average inflation rate of 3.30% has a compounding effect between 2005 and 2008. As noted above, this yearly inflation rate compounds to produce an overall price difference of 10.24% over 3 years.

To help put this inflation into perspective, if we had invested $1 in the S&P 500 index in 2005, our investment would be nominally worth approximately $0.79 in 2008. This is a return on investment of -20.79%, with an absolute return of $-0.21.

These numbers are not inflation adjusted, so they are considered nominal. In order to evaluate the real return on our investment, we must calculate the return with inflation taken into account.

The compounding effect of inflation would account for 9.29% of returns ($-0.02) during this period. This means the inflation-adjusted real return of our $1 investment is $-0.19.

Investment in S&P 500 Index, 2005-2008
Original Amount Final Amount Change
Nominal $1 $0.79 -20.79%
Real
Inflation Adjusted
$1 $-0.19 -18.86%


News headlines from 2005

Politics and news often influence economic performance. Here's what was happening at the time:

  • Egyptian President Hosni Mubarak asks Parliament to amend Article 76 and orders constitutional changes in order to allow multi-candidate presidential elections.
  • Syria's 29-year-long military domination of Lebanon ends, after it withdraws the last of its 14,000 troops under international pressure.
  • A coordinated bomb attack hits London's public transport system, during the morning rush hour, killing 52 and injuring a further 700 people.
  • Angela Merkel becomes first female Chancellor of Germany.

Data Source & Citation

Raw data for these calculations comes from the Bureau of Labor Statistics' (CPI), established in 1913. Inflation data from 1665 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University.

You may use the following MLA citation for this page: “$1 in 2005 → 2008 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 20 Jun. 2019, https://www.officialdata.org/2005-dollars-in-2008?amount=1.

Special thanks to QuickChart for providing downloadable chart images.

in2013dollars.com is a reference website maintained by the Official Data Foundation.


» Read more about inflation and investment.

Inflation from 2005 to 2008
Cumulative price change 10.24%
Average inflation rate 3.30%
Converted amount ($1 base) $1.10
Price difference ($1 base) $0.10
CPI in 2005 195.300
CPI in 2008 215.303
Inflation in 2005 3.39%
Inflation in 2008 3.84%