U.S. inflation rate in 1890: -1.09%

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Inflation in 1890 and Its Effect on Dollar Value

Purchasing power increased by 1.09% in 1890 compared to the previous year, 1889. On average, you would have to spend 1.09% less money in 1890 than in 1889 for the same item. This is an example of deflation.

In other words, $1 in 1889 is equivalent in purchasing power to $0.99 in 1890.

The 1889 inflation rate was -3.16%. The inflation rate in 1890 was -1.09%. The 1890 inflation rate is lower compared to the average inflation rate of 2.63% per year between 1890 and 2018.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1890 was 9.1. It was 9.2 in the previous year, 1889. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation. Because the 1890 CPI is less than 1889 CPI, negative inflation (also known as deflation) has occurred.


Inflation from 1889 to 1890
Average inflation rate -1.09%
Converted amount ($1 base) $0.99
Price difference ($1 base) $-0.01
CPI in 1889 9.200
CPI in 1890 9.100
Inflation in 1889 -3.16%
Inflation in 1890 -1.09%


U.S. inflation chart since 1665


Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £1.00 in 1889 would be equivalent to £1.00 in 1890, an absolute change of £0.00 and a cumulative change of 0.00%.

Compare these numbers to the US's overall absolute change of $-0.01 and total percent change of -1.09%.


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 1889 and 1890.

Compare these values to the overall average of -1.09% per year:

Category Avg Inflation (%) Total Inflation (%) $1 in 1889 → 1890
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 1889. This table and visualization use the earliest available data for each category.



How to Calculate Inflation Rate for $1, 1889 to 1890

This inflation calculator uses the following inflation rate formula:

CPI in 1890CPI in 1889
×
1889 USD value
=
1890 USD value

Then plug in historical CPI values. The U.S. CPI was 9.2 in the year 1889 and 9.1 in 1890:

9.19.2
×
$1
=
$0.99

$1 in 1889 has the same "purchasing power" or "buying power" as $0.99 in 1890.

To get the total inflation rate for the 1 years between 1889 and 1890, we use the following formula:

CPI in 1890 - CPI in 1889CPI in 1889
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

9.1 - 9.29.2
×
100
=
-1%

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 1889, our investment would be nominally worth approximately $1.00 in 1890. This is a return on investment of 0.49%, with an absolute return of $0.00.

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 -1.10% of returns ($0.00) during this period. This means the inflation-adjusted real return of our $1 investment is $0.00.

Investment in S&P 500 Index, 1889-1890
Original Amount Final Amount Change
Nominal $1 $1.00 0.49%
Real
Inflation Adjusted
$1 $0.00 0.49%


News headlines from 1889

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

  • George Eastman's Kodak flexible rolled films are sold for the first time.
  • The World Fair, "Exposition Universelle" opens in Paris, after the completion of the Eiffel Tower.
  • Nintendo Koppai is founded by Fusajiro Yamauchi, whose goal was to produce and market Hanafuda, card game. The company is today known as Nintendo Company, Limited

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 1890 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 15 Dec. 2018, https://www.officialdata.org/inflation-rate-in-1890.

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


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