U.S. inflation rate in 1923: 1.79%

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Inflation in 1923 and Its Effect on Dollar Value

Purchasing power decreased by 1.79% in 1923 compared to the previous year, 1922. On average, you would have to spend 1.79% more money in 1923 than in 1922 for the same item.

In other words, $1 in 1922 is equivalent in purchasing power to $1.02 in 1923.

The 1922 inflation rate was -6.15%. The inflation rate in 1923 was 1.79%. The 1923 inflation rate is lower compared to the average inflation rate of 2.87% per year between 1923 and 2018.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1923 was 17.1. It was 16.8 in the previous year, 1922. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.


Inflation from 1922 to 1923
Average inflation rate 1.79%
Converted amount ($1 base) $1.02
Price difference ($1 base) $0.02
CPI in 1922 16.800
CPI in 1923 17.100
Inflation in 1922 -6.15%
Inflation in 1923 1.79%


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

Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1922 to 1923 (figures shown are purchasing power equivalents of $1):

Detroit, Michigan experienced the highest rate of inflation during the 1 years between 1922 and 1923 (2.96%).

Seattle, Washington experienced the lowest rate of inflation during the 1 years between 1922 and 1923 (-1.44%).

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 1922 would be equivalent to £0.94 in 1923, an absolute change of £-0.06 and a cumulative change of -6.03%.

In Canada, CA$1.00 in 1922 would be equivalent to CA$1.00 in 1923, an absolute change of CA$0.00 and a cumulative change of 0.00%.

Compare these numbers to the US's overall absolute change of $0.02 and total percent change of 1.79%.


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 1922 and 1923.

Compare these values to the overall average of 1.79% per year:

Category Avg Inflation (%) Total Inflation (%) $1 in 1922 → 1923
Food 3.31 3.31 1.03
Shelter 0.00 0.00 1.00
Energy 0.00 0.00 1.00
Apparel 0.89 0.89 1.01
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 1922. This table and visualization use the earliest available data for each category.



How to Calculate Inflation Rate for $1, 1922 to 1923

This inflation calculator uses the following inflation rate formula:

CPI in 1923CPI in 1922
×
1922 USD value
=
1923 USD value

Then plug in historical CPI values. The U.S. CPI was 16.8 in the year 1922 and 17.1 in 1923:

17.116.8
×
$1
=
$1.02

$1 in 1922 has the same "purchasing power" or "buying power" as $1.02 in 1923.

To get the total inflation rate for the 1 years between 1922 and 1923, we use the following formula:

CPI in 1923 - CPI in 1922CPI in 1922
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

17.1 - 16.816.8
×
100
=
2%

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 1922, our investment would be nominally worth approximately $1.36 in 1923. This is a return on investment of 36.09%, with an absolute return of $0.36.

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 1.75% of returns ($0.01) during this period. This means the inflation-adjusted real return of our $1 investment is $0.35.

Investment in S&P 500 Index, 1922-1923
Original Amount Final Amount Change
Nominal $1 $1.36 36.09%
Real
Inflation Adjusted
$1 $0.35 35.45%


News headlines from 1922

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

  • Egypt is granted independence from Great Britain.
  • Mahatma Gandhi is sentenced to six years imprisonment for disobedience
  • Stalin is appointed General Secretary of the Russian Communist Party.
  • The Ottoman Empire's last sultan Mehmed VI is expelled to Malta on British warship.

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 1923 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 13 Dec. 2018, https://www.officialdata.org/inflation-rate-in-1923.

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


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