U.S. inflation rate in 1996: 2.95%

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Inflation in 1996 and Its Effect on Dollar Value

Purchasing power decreased by 2.95% in 1996 compared to the previous year, 1995. On average, you would have to spend 2.95% more money in 1996 than in 1995 for the same item.

In other words, $1 in 1995 is equivalent in purchasing power to $1.03 in 1996.

The 1995 inflation rate was 2.83%. The inflation rate in 1996 was 2.95%. The 1996 inflation rate is higher compared to the average inflation rate of 2.19% per year between 1996 and 2018.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1996 was 156.9. It was 152.4 in the previous year, 1995. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.


Inflation from 1995 to 1996
Average inflation rate 2.95%
Converted amount ($1 base) $1.03
Price difference ($1 base) $0.03
CPI in 1995 152.400
CPI in 1996 156.900
Inflation in 1995 2.83%
Inflation in 1996 2.95%


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 1995 to 1996 (figures shown are purchasing power equivalents of $1):

Denver, Colorado experienced the highest rate of inflation during the 1 years between 1995 and 1996 (3.52%).

Seattle, Washington experienced the lowest rate of inflation during the 1 years between 1995 and 1996 (0.00%).

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 1995 would be equivalent to £1.02 in 1996, an absolute change of £0.02 and a cumulative change of 2.41%.

In Canada, CA$1.00 in 1995 would be equivalent to CA$1.02 in 1996, an absolute change of CA$0.02 and a cumulative change of 2.16%.

Compare these numbers to the US's overall absolute change of $0.03 and total percent change of 2.95%.


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 1995 and 1996.

Compare these values to the overall average of 2.95% per year:

Category Avg Inflation (%) Total Inflation (%) $1 in 1995 → 1996
Food 3.28 3.28 1.03
Shelter 3.23 3.23 1.03
Energy 4.66 4.66 1.05
Apparel -0.20 -0.20 1.00
New vehicles 1.94 1.94 1.02
Used cars and trucks 0.36 0.36 1.00
Transportation services 2.63 2.63 1.03
Medical care services 3.67 3.67 1.04
Medical care commodities 2.89 2.89 1.03

It's important to note that not all categories may be tracked since 1995. This table and visualization use the earliest available data for each category.



How to Calculate Inflation Rate for $1, 1995 to 1996

This inflation calculator uses the following inflation rate formula:

CPI in 1996CPI in 1995
×
1995 USD value
=
1996 USD value

Then plug in historical CPI values. The U.S. CPI was 152.4 in the year 1995 and 156.9 in 1996:

156.9152.4
×
$1
=
$1.03

$1 in 1995 has the same "purchasing power" or "buying power" as $1.03 in 1996.

To get the total inflation rate for the 1 years between 1995 and 1996, we use the following formula:

CPI in 1996 - CPI in 1995CPI in 1995
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

156.9 - 152.4152.4
×
100
=
3%

Alternate Measurements of Inflation

The above data describe the CPI for all items. Also of note is the Core CPI, which measures inflation for all items except for the more volatile categories of food and energy. Core inflation averaged 2.69% per year between 1995 and 1996 (vs all-CPI inflation of 2.95%), for an inflation total of 2.69%.

When using the core inflation measurement, $1 in 1995 is equivalent in buying power to $1.03 in 1996, a difference of $0.03. Recall that for All Items, the converted amount is $1.03 with a difference of $0.03.

In 1995, core inflation was 3.02%.


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 1995, our investment would be nominally worth approximately $1.72 in 1996. This is a return on investment of 72.34%, with an absolute return of $0.72.

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 2.87% of returns ($0.02) during this period. This means the inflation-adjusted real return of our $1 investment is $0.70.

Investment in S&P 500 Index, 1995-1996
Original Amount Final Amount Change
Nominal $1 $1.72 72.34%
Real
Inflation Adjusted
$1 $0.70 70.27%


News headlines from 1995

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

  • Bosnian Serbs massacre over 7,000 Bosnian Muslims in Srebrenica.
  • Scientists discover the Hale-Bopp Comet; which later became visible to the naked eye.
  • Signing of the Dayton Agreement in Paris in order to end conflicts between former Yugoslavian republics
  • 170 countries agree to the unconditional and indefinite extending of the Nuclear Non-proliferation Treaty.
  • Austria, Finland and Sweden accede to the European Union.

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 1996 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 14 Nov. 2018, https://www.officialdata.org/inflation-rate-in-1996.

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


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