U.S. inflation rate in 1926: 1.14%

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Inflation in 1926 and Its Effect on Dollar Value

Purchasing power decreased by 1.14% in 1926 compared to the previous year, 1925. On average, you would have to spend 1.14% more money in 1926 than in 1925 for the same item.

In other words, $1 in 1925 is equivalent in purchasing power to $1.01 in 1926.

The 1925 inflation rate was 2.34%. The inflation rate in 1926 was 1.14%. The 1926 inflation rate is lower compared to the average inflation rate of 2.93% per year between 1926 and 2018.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1926 was 17.7. It was 17.5 in the previous year, 1925. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.


Inflation from 1925 to 1926
Average inflation rate 1.14%
Converted amount ($1 base) $1.01
Price difference ($1 base) $0.01
CPI in 1925 17.500
CPI in 1926 17.700
Inflation in 1925 2.34%
Inflation in 1926 1.14%


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 1925 to 1926 (figures shown are purchasing power equivalents of $1):

Boston, Massachusetts experienced the highest rate of inflation during the 1 years between 1925 and 1926 (3.69%).

Seattle, Washington experienced the lowest rate of inflation during the 1 years between 1925 and 1926 (0.26%).

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 1925 would be equivalent to £0.99 in 1926, an absolute change of £-0.01 and a cumulative change of -0.54%.

In Canada, CA$1.00 in 1925 would be equivalent to CA$0.99 in 1926, an absolute change of CA$-0.01 and a cumulative change of -1.08%.

Compare these numbers to the US's overall absolute change of $0.01 and total percent change of 1.14%.


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 1925 and 1926.

Compare these values to the overall average of 1.14% per year:

Category Avg Inflation (%) Total Inflation (%) $1 in 1925 → 1926
Food 3.31 3.31 1.03
Shelter 0.00 0.00 1.00
Energy 0.00 0.00 1.00
Apparel -1.77 -1.77 0.98
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 1925. This table and visualization use the earliest available data for each category.



How to Calculate Inflation Rate for $1, 1925 to 1926

This inflation calculator uses the following inflation rate formula:

CPI in 1926CPI in 1925
×
1925 USD value
=
1926 USD value

Then plug in historical CPI values. The U.S. CPI was 17.5 in the year 1925 and 17.7 in 1926:

17.717.5
×
$1
=
$1.01

$1 in 1925 has the same "purchasing power" or "buying power" as $1.01 in 1926.

To get the total inflation rate for the 1 years between 1925 and 1926, we use the following formula:

CPI in 1926 - CPI in 1925CPI in 1925
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

17.7 - 17.517.5
×
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 1925, our investment would be nominally worth approximately $1.40 in 1926. This is a return on investment of 40.29%, with an absolute return of $0.40.

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 1.13% of returns ($0.00) during this period. This means the inflation-adjusted real return of our $1 investment is $0.40.

Investment in S&P 500 Index, 1925-1926
Original Amount Final Amount Change
Nominal $1 $1.40 40.29%
Real
Inflation Adjusted
$1 $0.40 39.84%


News headlines from 1925

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

  • Mein Kampf is published by Adolf Hitler.
  • The Ku Klux Klan's first national march takes place in Washington.
  • The last Qajar Shah of Iran is deposed with Reza Shah Pahlavi taking over.
  • Scopes monkey trial ends in Dayton, Tennessee, finding John T. Scopes guilty of teaching evolution.

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 1926 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 19 Dec. 2018, https://www.officialdata.org/inflation-rate-in-1926.

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


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