Purchasing power increased by 10.50% in 1921 compared to the previous year, 1920. On average, you would have to spend 10.50% less money in 1921 than in 1920 for the same item. This is an example of deflation.
In other words, $1 in 1920 is equivalent in purchasing power to $0.89 in 1921.
The 1920 inflation rate was 15.61%. The inflation rate in 1921 was -10.50%. The 1921 inflation rate is lower compared to the average inflation rate of 2.76% per year between 1921 and 2018.
Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1921 was 17.9. It was 20 in the previous year, 1920. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation. Because the 1921 CPI is less than 1920 CPI, negative inflation (also known as deflation) has occurred.
|Average inflation rate||-10.50%|
|Converted amount ($1 base)||$0.89|
|Price difference ($1 base)||$-0.11|
|CPI in 1920||20.000|
|CPI in 1921||17.900|
|Inflation in 1920||15.61%|
|Inflation in 1921||-10.50%|
Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1920 to 1921 (figures shown are purchasing power equivalents of $1):
San Francisco, California experienced the highest rate of inflation during the 1 years between 1920 and 1921 (-7.98%).
Atlanta, Georgia experienced the lowest rate of inflation during the 1 years between 1920 and 1921 (-11.45%).
Note that some locations showing 0% inflation may have not yet reported latest data.
Inflation can also vary widely by country. For comparison, in the UK £1.00 in 1920 would be equivalent to £0.91 in 1921, an absolute change of £-0.09 and a cumulative change of -8.70%.
In Canada, CA$1.00 in 1920 would be equivalent to CA$0.84 in 1921, an absolute change of CA$-0.16 and a cumulative change of -16.07%.
Compare these numbers to the US's overall absolute change of $-0.11 and total percent change of -10.50%.
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 1920 and 1921.
Compare these values to the overall average of -10.50% per year:
|Category||Avg Inflation (%)||Total Inflation (%)||$1 in 1920 → 1921|
|Used cars and trucks||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 1920. This table and visualization use the earliest available data for each category.
This inflation calculator uses the following inflation rate formula:
Then plug in historical CPI values. The U.S. CPI was 20 in the year 1920 and 17.9 in 1921:
$1 in 1920 has the same "purchasing power" or "buying power" as $0.89 in 1921.
To get the total inflation rate for the 1 years between 1920 and 1921, we use the following formula:
Plugging in the values to this equation, we get:
To help put this inflation into perspective, if we had invested $1 in the S&P 500 index in 1920, our investment would be nominally worth approximately $0.95 in 1921. This is a return on investment of -5.23%, with an absolute return of $-0.05.
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 -11.73% of returns ($0.01) during this period. This means the inflation-adjusted real return of our $1 investment is $-0.06.
|Original Amount||Final Amount||Change|
Politics and news often influence economic performance. Here's what was happening at the time:
Raw data for these calculations comes from the Bureau of Labor Statistics' Consumer Price Index (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 1921 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 13 Dec. 2018, https://www.officialdata.org/inflation-rate-in-1921.
in2013dollars.com is a reference website maintained by the Official Data Foundation.