U.S. inflation rate in 2004: 2.66%

Inflation in 2004 and its effect on dollar value

$1 in 2003 is equivalent in purchasing power to about $1.03 in 2004. The dollar had an average inflation rate of 2.66% per year between 2003 and 2004, producing a cumulative price increase of 2.66%. Purchasing power decreased by 2.66% in 2004 compared to 2003. On average, you would have to spend 2.66% more money in 2004 than in 2003 for the same item.

This means that prices in 2004 are 1.03 times higher than average prices since 2003, according to the Bureau of Labor Statistics consumer price index.

The 2003 inflation rate was 2.28%. The inflation rate in 2004 was 2.66%. The 2004 inflation rate is higher compared to the average inflation rate of 2.27% per year between 2004 and 2021.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 2004 was 188.90. It was 184.00 in the previous year, 2003. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.

Inflation from 2003 to 2004
Average inflation rate 2.66%
Converted amount ($1 base) $1.03
Price difference ($1 base) $0.03
CPI in 2003 184.000
CPI in 2004 188.900
Inflation in 2003 2.28%
Inflation in 2004 2.66%
$1 in 2003 $1.03 in 2004

USD Inflation since 1913
Annual Rate, the 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 2003 to 2004 (figures shown are purchasing power equivalents of $1):

San Diego, California experienced the highest rate of inflation during the 1 years between 2003 and 2004 (5.43%).

Denver, Colorado experienced the lowest rate of inflation during the 1 years between 2003 and 2004 (0.11%).

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 2003 would be equivalent to £1.03 in 2004, an absolute change of £0.03 and a cumulative change of 2.98%.

In Canada, CA$1.00 in 2003 would be equivalent to CA$1.02 in 2004, an absolute change of CA$0.02 and a cumulative change of 2.13%.

Compare these numbers to the US's overall absolute change of $0.03 and total percent change of 2.66%.

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 2003 and 2004.

Compare these values to the overall average of 2.66% per year:

Category Avg Inflation (%) Total Inflation (%) $1 in 2003 → 2004
Food and beverages 3.38 3.38 1.03
Housing 2.57 2.57 1.03
Apparel -0.37 -0.37 1.00
Transportation 3.52 3.52 1.04
Medical care 4.39 4.39 1.04
Recreation 1.05 1.05 1.01
Education and communication 1.62 1.62 1.02
Other goods and services 2.01 2.01 1.02

For all these visualizations, it's important to note that not all categories may have been tracked since 2003. This table and charts use the earliest available data for each category.

How to Calculate Inflation Rate for $1, 2003 to 2004

Our calculations use the following inflation rate formula to calculate the change in value between 2003 and 2004:

CPI in 2004 CPI in 2003
2003 USD value
2004 USD value

Then plug in historical CPI values. The U.S. CPI was 184 in the year 2003 and 188.9 in 2004:


$1 in 2003 has the same "purchasing power" or "buying power" as $1.03 in 2004.

To get the total inflation rate for the 1 years between 2003 and 2004, we use the following formula:

CPI in 2004 - CPI in 2003CPI in 2003
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

188.9 - 184184

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 1.76% per year between 2003 and 2004 (vs all-CPI inflation of 2.66%), for an inflation total of 1.76%.

When using the core inflation measurement, $1 in 2003 is equivalent in buying power to $1.02 in 2004, a difference of $0.02. Recall that for All Items, the converted amount is $1.03 with a difference of $0.03.

In 2003, core inflation was 1.45%.

Chained CPI is an alternative measurement that takes into account how consumers adjust spending for similar items. Chained inflation averaged 2.51% per year between 2003 and 2004, a total inflation amount of 1.76%.

According to the Chained CPI measurement, $1 in 2003 is equal in buying power to $1.03 in 2004, a difference of $0.03 (versus a converted amount of $1.03/change of $0.03 for All Items).

In 2003, chained inflation was 2.04%.

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 2003, our investment would be nominally worth approximately $1.36 in 2004. This is a return on investment of 36.34%, with an absolute return of $0.36 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 2.59% of returns ($0.04) during this period. This means the inflation-adjusted real return of our $1 investment is $0.33. 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, 2003-2004
Original Amount Final Amount Change
Nominal $1 $1.36 36.34%
Inflation Adjusted
$1 $1.33 32.80%

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 2003 to latest available data for 2004 using average monthly close price.

For more details on the S&P 500 between 2003 and 2004, see the stock market returns calculator.

News headlines from 2003

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

  • Despite a lack of support from the United Nations, a coalition lead by America and Britain invades Iraq.
  • Baghdad falls, ending the invasion of Iraq.
  • 10 new members are admitted to the European Union after signing the Treaty of Accession in Athens.

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 2004 | Inflation Calculator.” Official Inflation Data, Alioth Finance, 29 Nov. 2021, https://www.officialdata.org/inflation-rate-in-2004.

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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» Read more about inflation and investment.

Inflation from 2003 to 2004
Average inflation rate 2.66%
Converted amount ($1 base) $1.03
Price difference ($1 base) $0.03
CPI in 2003 184.000
CPI in 2004 188.900
Inflation in 2003 2.28%
Inflation in 2004 2.66%
$1 in 2003 $1.03 in 2004