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# U.S. inflation rate in 1874: -5.00%

### Inflation in 1874 and Its Effect on Dollar Value

Purchasing power increased by 5.00% in 1874 compared to 1873. On average, you would have to spend 5.00% less money in 1874 than in 1873 for the same item. This is an example of deflation.

In other words, \$1 in 1873 is equivalent in purchasing power to about \$0.95 in 1874.

The 1873 inflation rate was -1.64%. The inflation rate in 1874 was -5.00%. The 1874 inflation rate is lower compared to the average inflation rate of 2.17% per year between 1874 and 2019.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1874 was 11.40. It was 12.00 in the previous year, 1873. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation. Because the 1874 CPI is less than 1873 CPI, negative inflation (also known as deflation) has occurred.

 Average inflation rate -5.00% Converted amount (\$1 base) \$0.95 Price difference (\$1 base) \$-0.05 CPI in 1873 12.000 CPI in 1874 11.400 Inflation in 1873 -1.64% Inflation in 1874 -5.00%

### Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £1.00 in 1873 would be equivalent to £0.96 in 1874, an absolute change of £-0.04 and a cumulative change of -3.85%.

Compare these numbers to the US's overall absolute change of \$-0.05 and total percent change of -5.00%.

### 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 1873 and 1874.

Compare these values to the overall average of -5.00% per year:

Category Avg Inflation (%) Total Inflation (%) \$1 in 1873 → 1874
Food 0.00 0.00 1.00
Shelter 0.00 0.00 1.00
Energy 0.00 0.00 1.00
Apparel 0.00 0.00 1.00
New vehicles 0.00 0.00 1.00
Used cars and trucks 0.00 0.00 1.00
Transportation services 0.00 0.00 1.00
Medical care services 0.00 0.00 1.00
Medical care commodities 0.00 0.00 1.00

It's important to note that not all categories may be tracked since 1873. This table and visualization use the earliest available data for each category.

### How to Calculate Inflation Rate for \$1, 1873 to 1874

This inflation calculator uses the following inflation rate formula:

CPI in 1874CPI in 1873
×
1873 USD value
=
1874 USD value

Then plug in historical CPI values. The U.S. CPI was 12 in the year 1873 and 11.4 in 1874:

11.412
×
\$1
=
\$0.95

\$1 in 1873 has the same "purchasing power" or "buying power" as \$0.95 in 1874.

To get the total inflation rate for the 1 years between 1873 and 1874, we use the following formula:

CPI in 1874 - CPI in 1873CPI in 1873
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

11.4 - 1212
×
100
=
-5%

### Comparison to S&P 500 Index

To help put this inflation into perspective, if we had invested \$1 in the S&P 500 index in 1873, our investment would be nominally worth approximately \$1.02 in 1874. This is a return on investment of 2.08%, with an absolute return of \$0.02.

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 -5.26% of returns (\$0.00) during this period. This means the inflation-adjusted real return of our \$1 investment is \$0.02.

Investment in S&P 500 Index, 1873-1874
Original Amount Final Amount Change
Nominal \$1 \$1.02 2.08%
Real
Inflation Adjusted
\$1 \$0.02 2.19%

### News headlines from 1873

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

• The first Battle of the Stronghold takes place where the US Army is defeated by a group of Modoc warriors.
• John Morseby discovers the site of Port Moresby, Papua New Guinea and claims it for Britain.
• Sultan Bargash closes the slave market of Zanzibar.

### 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: “Inflation Rate in 1874 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 15 Oct. 2019, https://www.officialdata.org/inflation-rate-in-1874.

Special thanks to QuickChart for providing downloadable chart images.

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

 Average inflation rate -5.00% Converted amount (\$1 base) \$0.95 Price difference (\$1 base) \$-0.05 CPI in 1873 12.000 CPI in 1874 11.400 Inflation in 1873 -1.64% Inflation in 1874 -5.00%