# U.S. inflation rate in 2020: 0.33%

\$

## Inflation in 2020 and its effect on dollar value

Purchasing power decreased by 0.33% in 2020 compared to 2019. On average, you would have to spend 0.33% more money in 2020 than in 2019 for the same item.

In other words, \$1 in 2019 is equivalent in purchasing power to about \$1.00 in 2020.

The 2019 inflation rate was 1.76%. The current year-over-year inflation rate (2019 to 2020) is now 0.33%1. If this number holds, the rate of inflation is so negligible that \$1 today will roughly maintain its value. The current inflation rate page gives more detail on the latest official inflation rates.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 2020 is 256.39. It was 255.66 in the previous year, 2019. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.

 Average inflation rate 0.33% Converted amount (\$1 base) \$1.00 Price difference (\$1 base) \$0.00 CPI in 2019 255.658 CPI in 2020 256.389 Inflation in 2019 1.76% Inflation in 2020 0.33%

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 2019 to 2020 (figures shown are purchasing power equivalents of \$1):

Boston, Massachusetts experienced the highest rate of inflation during the 1 years between 2019 and 2020 (1.51%).

San Diego, California experienced the lowest rate of inflation during the 1 years between 2019 and 2020 (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 2019 would be equivalent to £1.02 in 2020, an absolute change of £0.01 and a cumulative change of 1.50%.

In Canada, CA\$1.00 in 2019 would be equivalent to CA\$1.02 in 2020, an absolute change of CA\$0.02 and a cumulative change of 2.25%.

Compare these numbers to the US's overall absolute change of \$0.00 and total percent change of 0.29%.

## 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 2019 and 2020.

Compare these values to the overall average of 0.33% per year:

Category Avg Inflation (%) Total Inflation (%) \$1 in 2019 → 2020
Food and beverages 1.70 1.70 1.02
Housing 1.60 1.60 1.02
Apparel -1.75 -1.75 0.98
Transportation -3.17 -3.17 0.97
Medical care 3.04 3.04 1.03
Recreation 1.03 1.03 1.01
Education and communication 1.11 1.11 1.01
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 2019. This table and charts use the earliest available data for each category.

## How to Calculate Inflation Rate for \$1 since 2019

Our calculations use the following inflation rate formula to calculate the change in value between 2019 and today:

CPI today CPI in 2019
×
2019 USD value
=
Today's value

Then plug in historical CPI values. The U.S. CPI was 255.6575 in the year 2019 and 256.389 in 2020:

256.389255.6575
×
\$1
=
\$1.00

\$1 in 2019 has the same "purchasing power" or "buying power" as \$1.00 in 2020.

To get the total inflation rate for the 1 years between 2019 and 2020, we use the following formula:

CPI in 2020 - CPI in 2019CPI in 2019
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

256.389 - 255.6575255.6575
×
100
=
0%

## 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 1.31% per year between 2019 and 2020 (vs all-CPI inflation of 0.33%), for an inflation total of 1.31%.

When using the core inflation measurement, \$1 in 2019 is equivalent in buying power to \$1.01 in 2020, a difference of \$0.01. Recall that for All Items, the converted amount is \$1.00 with a difference of \$0.00.

In 2019, core inflation was 2.19%.

Chained CPI is an alternative measurement that takes into account how consumers adjust spending for similar items. Chained inflation averaged 0.66% per year between 2019 and 2020, a total inflation amount of 1.31%.

According to the Chained CPI measurement, \$1 in 2019 is equal in buying power to \$1.01 in 2020, a difference of \$0.01 (versus a converted amount of \$1.00/change of \$0.00 for All Items).

In 2019, chained inflation was 1.51%.

## 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 2019, our investment would be nominally worth approximately \$1.08 in 2020. This is a return on investment of 8.11%, with an absolute return of \$0.08 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 0.29% of returns (\$0.00) during this period. This means the inflation-adjusted real return of our \$1 investment is \$0.08. 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, 2019-2020
Original Amount Final Amount Change
Nominal \$1 \$1.08 8.11%
Real
\$1 \$1.08 7.80%

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 2019 to latest available data for 2020 using average monthly close price.

For more details on the S&P 500 between 2019 and 2020, 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 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 2020 | Inflation Calculator.” Official Inflation Data, Alioth Finance, 3 Jun. 2020, https://www.officialdata.org/inflation-rate-in-2020.