U.S. inflation rate in 1920: 15.61%

Inflation in 1920 and its effect on dollar value

$1 in 1919 is equivalent in purchasing power to about $1.16 in 1920. The dollar had an average inflation rate of 15.61% per year between 1919 and 1920, producing a cumulative price increase of 15.61%. Purchasing power decreased by 15.61% in 1920 compared to 1919. On average, you would have to spend 15.61% more money in 1920 than in 1919 for the same item.

This means that prices in 1920 are 1.16 times higher than average prices since 1919, according to the Bureau of Labor Statistics consumer price index.

The inflation rate in 1919 was 14.57%. The inflation rate in 1920 was 15.61%. The 1920 inflation rate is higher compared to the average inflation rate of 2.68% per year between 1920 and 2022.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1920 was 20.00. It was 17.30 in the previous year, 1919. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.


Inflation from 1919 to 1920
Average inflation rate15.61%
Converted amount ($1 base)$1.16
Price difference ($1 base)$0.16
CPI in 191917.300
CPI in 192020.000
Inflation in 191914.57%
Inflation in 192015.61%
$1 in 1919$1.16 in 1920

Recent USD inflation
Annual Rate, the Bureau of Labor Statistics CPI
Download

Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1919 to 1920 (figures shown are purchasing power equivalents of $1):

  • Atlanta, Georgia: 16.70% average rate, $1 → $1.17, cumulative change of 16.70%

Atlanta, Georgia experienced the highest rate of inflation during the 1 years between 1919 and 1920 (16.70%).

Atlanta, Georgia experienced the lowest rate of inflation during the 1 years between 1919 and 1920 (16.70%).

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 1919 would be equivalent to £1.16 in 1920, an absolute change of £0.16 and a cumulative change of 15.53%.

In Canada, CA$1.00 in 1919 would be equivalent to CA$1.16 in 1920, an absolute change of CA$0.16 and a cumulative change of 16.30%.

Compare these numbers to the US's overall absolute change of $0.16 and total percent change of 15.61%.


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 1919 and 1920.

Compare these values to the overall average of 15.61% per year:

CategoryAvg Inflation (%)Total Inflation (%)$1 in 1919 → 1920
Food and beverages0.000.001.00
Housing0.000.001.00
Apparel13.4313.431.13
Transportation0.000.001.00
Medical care0.000.001.00
Recreation0.000.001.00
Education and communication0.000.001.00
Other goods and services0.000.001.00

For all these visualizations, it's important to note that not all categories may have been tracked since 1919. This table and charts use the earliest available data for each category.



How to calculate inflation rate for $1, 1919 to 1920

Our calculations use the following inflation rate formula to calculate the change in value between 1919 and 1920:

CPI in 1920 CPI in 1919
×
1919 USD value
=
1920 USD value

Then plug in historical CPI values. The U.S. CPI was 17.3 in the year 1919 and 20 in 1920:

2017.3
×
$1
=
$1.16

$1 in 1919 has the same "purchasing power" or "buying power" as $1.16 in 1920.

To get the total inflation rate for the 1 years between 1919 and 1920, we use the following formula:

CPI in 1920 - CPI in 1919CPI in 1919
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

20 - 17.317.3
×
100
=
16%

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 1919, our investment would be nominally worth approximately $1.03 in 1920. This is a return on investment of 2.97%, with an absolute return of $0.03 on top of the original $1.

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 13.50% of returns ($0.14) during this period. This means the inflation-adjusted real return of our $1 investment is $-0.11. You may also want to account for capital gains tax, which would take your real return down to around $0 for most people.

Investment in S&P 500 Index, 1919-1920
Original AmountFinal AmountChange
Nominal$1$1.032.97%
Real
Inflation Adjusted
$1$0.89-10.93%

Information displayed above may differ slightly from other S&P 500 calculators. Minor discrepancies can occur because we use the latest CPI data for inflation, annualized inflation numbers for previous years, and we compute S&P price and dividends from January of 1919 to latest available data for 1920 using average monthly close price.

For more details on the S&P 500 between 1919 and 1920, see the stock market returns calculator.


Data source & citation

Raw data for these calculations comes from the Bureau of Labor Statistics' (CPI), established in 1913. Inflation data from 1634 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University and from the American Antiquarian Society.

You may use the following MLA citation for this page: “Inflation Rate in 1920 | Inflation Calculator.” Official Inflation Data, Alioth Finance, 21 Sep. 2022, https://www.officialdata.org/inflation-rate-in-1920.

Special thanks to QuickChart for their chart image API, which is used for chart downloads.

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


Ian Webster

About the author

Ian Webster is an engineer and data expert based in San Mateo, California. He has worked for Google, NASA, and consulted for governments around the world on data pipelines and data analysis. Disappointed by the lack of clear resources on the impacts of inflation on economic indicators, Ian believes this website serves as a valuable public tool. Ian earned his degree in Computer Science from Dartmouth College.

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Inflation from 1919 to 1920
Average inflation rate15.61%
Converted amount ($1 base)$1.16
Price difference ($1 base)$0.16
CPI in 191917.300
CPI in 192020.000
Inflation in 191914.57%
Inflation in 192015.61%
$1 in 1919$1.16 in 1920