# U.S. inflation rate in 1788: -4.30%

\$

## Inflation in 1788 and its effect on dollar value

Purchasing power increased by 4.30% in 1788 compared to 1787. On average, you would have to spend 4.30% less money in 1788 than in 1787 for the same item. This is an example of deflation.

In other words, \$1 in 1787 is equivalent in purchasing power to about \$0.96 in 1788.

The 1787 inflation rate was -2.11%. The inflation rate in 1788 was -4.30%. The 1788 inflation rate is lower compared to the average inflation rate of 1.46% per year between 1788 and 2020.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1788 was 8.90. It was 9.30 in the previous year, 1787. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation. Because the 1788 CPI is less than 1787 CPI, negative inflation (also known as deflation) has occurred.

 Average inflation rate -4.30% Converted amount (\$1 base) \$0.96 Price difference (\$1 base) \$-0.04 CPI in 1787 9.300 CPI in 1788 8.900 Inflation in 1787 -2.11% Inflation in 1788 -4.30%

USD Inflation since 1635
Annual Rate, the Bureau of Labor Statistics CPI

## Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £1.00 in 1787 would be equivalent to £1.04 in 1788, an absolute change of £0.04 and a cumulative change of 4.17%.

Compare these numbers to the US's overall absolute change of \$-0.04 and total percent change of -4.30%.

## Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. Breaking down these categories helps explain the main drivers behind price changes. This chart shows the average rate of inflation for select CPI categories between 1787 and 1788.

Compare these values to the overall average of -4.30% per year:

Category Avg Inflation (%) Total Inflation (%) \$1 in 1787 → 1788
Food and beverages 0.00 0.00 1.00
Housing 0.00 0.00 1.00
Apparel 0.00 0.00 1.00
Transportation 0.00 0.00 1.00
Medical care 0.00 0.00 1.00
Recreation 0.00 0.00 1.00
Education and communication 0.00 0.00 1.00
Other goods and services 0.00 0.00 1.00

For all these visualizations, it's important to note that not all categories may have been tracked since 1787. This table and charts use the earliest available data for each category.

## How to Calculate Inflation Rate for \$1, 1787 to 1788

Our calculations use the following inflation rate formula to calculate the change in value between 1787 and 1788:

CPI in 1788 CPI in 1787
×
1787 USD value
=
1788 USD value

Then plug in historical CPI values. The U.S. CPI was 9.3 in the year 1787 and 8.9 in 1788:

8.99.3
×
\$1
=
\$0.96

\$1 in 1787 has the same "purchasing power" or "buying power" as \$0.96 in 1788.

To get the total inflation rate for the 1 years between 1787 and 1788, we use the following formula:

CPI in 1788 - CPI in 1787CPI in 1787
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

8.9 - 9.39.3
×
100
=
-4%

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

• Eleven ships of criminals set sails to Botany Bay, Australia, led by Arthur Philip
• Delegates gather in Philadelphia in order to prepare and compose the US Constitution
• Children under 8 banned from labour by Austrian emperor Jozef II

## 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 1788 | Inflation Calculator.” Official Inflation Data, Alioth Finance, 29 May. 2020, https://www.officialdata.org/inflation-rate-in-1788.