Inflation rates in the United States of America (2024)

Performance over the last 63 years compared to the European Union

The size and economic structure of the United States is partly comparable with the European Union. As a result, the inflation curve often runs parallel over many years. There were only notable differences at the beginning of the 1980s and during the economic crisis around 2008, when in both cases European consumer prices rose more sharply than in the USA. However, the sharp rise from mid-2021 is clearly noticeable in both regions.

Performance based on 100% in 1959:

Differences between the USA and Europe

The global price increase in recent years is often attributed to the start of the war in Ukraine. The main reasons for this are rising energy prices due to the lack of natural gas supplies from Russia and, at the same time, exploding food prices because the "breadbasket" of Europe is supplying considerably less grain. Both are correct for Europe, but do not have a particularly strong impact on inflation in the USA. The United States produces far more energy than it consumes. It is therefore not at all dependent on Russian gas. Nor do they import grain from the distant Ukraine.

The differences become clearer if you take a closer look at the timeline. Prices had already started to rise a few months before the outbreak of the Russian attack. Although energy and grain certainly boosted inflation afterwards, they were not the trigger.

In the USA, inflation was caused by demand. After the last Covid-19 restrictions were lifted, the population had been saving for two years, money was looser again and demand increased. Retailers even experienced supply difficulties, which they compensated for with higher prices. In Europe, the pandemic restrictions were lifted more slowly, but earlier, so that this increase in consumption was not so noticeable. Due to the high dependency on Russian gas and Ukrainian grain, prices in Europe only rose drastically months later because consumers were suddenly consciously spending less. The reason for the inflation is therefore on the demand side.

Inflation dampened by the dollar

Overall, inflation in the USA has been noticeably more moderate in recent years than in Europe. This is also due to the strong dollar exchange rate, as crude oil is generally traded in US dollars. While the price of crude oil "only" rose by around 20% in 2022, the exchange rate increased at the same time and Europeans ultimately had to pay over 35% more per barrel. Within the USA, the dollar exchange rate therefore also dampens inflation.

Interest rate policy

The US Federal Reserve has a fixed inflation target of 2% per year and is acting much more aggressively than central banks in other countries. By increasing the interest rate differential to other countries (especially the euro countries), it makes the export of goods more expensive, which initially leads to an increase in prices outside the USA. Within the US, however, such a measure stabilizes the price structure for a certain period of time.

Inflation calculator for the United States of America

Enter any amount, a start year and an end year here. You will then be shown the amount that resulted from the original amount after inflation.

100 dollars in 1960 will still be 100 dollars in 2024. The nominal value does not change. What does change, is the purchasing power. In other words, the amount of goods that can be bought with this money. As inflation increases, this amount decreases.

Inflation rates for consumer goods in the United States of America

Energy and food

Historical inflation rates in comparison

Data basis: International Monetary Fund, World Bank and OECD Inflation CPI indicator (doi:10.1787/eee82e6e-en)