Purchasing power decreased by 3.23% in 2006 compared to the previous year, 2005. On average, you would have to spend 3.23% more money in 2006 than in 2005 for the same item.
In other words, $1 in 2005 is equivalent in purchasing power to $1.03 in 2006.
The 2005 inflation rate was 3.39%. The inflation rate in 2006 was 3.23%. The 2006 inflation rate is higher compared to the average inflation rate of 1.91% per year between 2006 and 2018.
Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 2006 was 201.6. It was 195.3 in the previous year, 2005. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.
|Average inflation rate||3.23%|
|Converted amount ($1 base)||$1.03|
|Price difference ($1 base)||$0.03|
|CPI in 2005||195.300|
|CPI in 2006||201.600|
|Inflation in 2005||3.39%|
|Inflation in 2006||3.23%|
Inflation can vary widely by city, even within the United States. Here's how some cities fared in 2005 to 2006 (figures shown are purchasing power equivalents of $1):
Miami-Fort Lauderdale, Florida experienced the highest rate of inflation during the 1 years between 2005 and 2006 (4.97%).
Minneapolis-St Paul, Minnesota experienced the lowest rate of inflation during the 1 years between 2005 and 2006 (1.61%).
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 2005 would be equivalent to £1.03 in 2006, an absolute change of £0.03 and a cumulative change of 3.20%.
In Canada, CA$1.00 in 2005 would be equivalent to CA$1.02 in 2006, an absolute change of CA$0.02 and a cumulative change of 1.67%.
Compare these numbers to the US's overall absolute change of $0.03 and total percent change of 3.23%.
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 2005 and 2006.
Compare these values to the overall average of 3.23% per year:
|Category||Avg Inflation (%)||Total Inflation (%)||$1 in 2005 → 2006|
|Used cars and trucks||0.41||0.41||1.00|
|Medical care services||4.14||4.14||1.04|
|Medical care commodities||3.58||3.58||1.04|
It's important to note that not all categories may be tracked since 2005. 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 195.3 in the year 2005 and 201.6 in 2006:
$1 in 2005 has the same "purchasing power" or "buying power" as $1.03 in 2006.
To get the total inflation rate for the 1 years between 2005 and 2006, we use the following formula:
Plugging in the values to this equation, we get:
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 2.51% per year between 2005 and 2006 (vs all-CPI inflation of 3.23%), for an inflation total of 2.51%.
When using the core inflation measurement, $1 in 2005 is equivalent in buying power to $1.03 in 2006, a difference of $0.03. Recall that for All Items, the converted amount is $1.03 with a difference of $0.03.
In 2005, core inflation was 2.15%.
Chained CPI is an alternative measurement that takes into account how consumers adjust spending for similar items. Chained inflation averaged 2.90% per year between 2005 and 2006, a total inflation amount of 2.51%.
According to the Chained CPI measurement, $1 in 2005 is equal in buying power to $1.03 in 2006, a difference of $0.03 (versus a converted amount of $1.03/change of $0.03 for All Items).
In 2005, chained inflation was 2.92%.
To help put this inflation into perspective, if we had invested $1 in the S&P 500 index in 2005, our investment would be nominally worth approximately $1.25 in 2006. This is a return on investment of 24.85%, with an absolute return of $0.25.
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 3.12% of returns ($0.01) during this period. This means the inflation-adjusted real return of our $1 investment is $0.24.
|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 2006 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 14 Nov. 2018, https://www.officialdata.org/inflation-rate-in-2006.
in2013dollars.com is a reference website maintained by the Official Data Foundation.