US Inflation

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Using Data Updated with February 2026 data as of: March 11, 2026

The Bureau of Labor Statistics is the primary source for data.

Recent Data and Perspectives

Research Summary and Editorial

February 2026 CPI -- another nothing burger.

The annual rate of inflation remains "sticky" around 2.5%, which is above the Federal Reserve's (arbitrary?) target rate of 2.0%.

Inflation dropped drastically from mid-2022 through mid-2023 and has since been meandering lower from about 3.5% down to about 2.5%, which is a range well within our pre-pandemic experiences since 1983.

From 1983 through 2019 (before Covid), average annual inflation was 2.7%.

Biden didn't do anything to create inflation, and Trump didn't do anything to "fix" it. Until the underlying trend changes and a particular policy can be shown to have caused that shift, what we’re seeing is a gradual, steady decline in inflation that began in July 2023. This pattern aligns with the unwinding of the global supply‑chain disruptions that built up during the pandemic, along with the natural fade‑out of the $931 billion in direct stimulus payments—an amount equal to roughly a one‑time 5% boost relative to the United States’ $18.5 trillion in annual household income.

While disinformative political narratives have fed a drastically more severe alternate reality and public perception among some populations, the rates we briefly experienced in 2021 and 2022 were far from record historical highs, and certainly significantly more short-lived that other periods of "high inflation."

However, after experiencing nearly three decades of relatively stable and low inflation, the extreme narratives have been easy to sell to a thoughtless population.

This all being said, I do think that the drastic and sudden deterioration in the jobs market coincides with and is directly attributable to the cost chaos and business uncertainty caused by the Unconstitutional Trump tariffs and now his war in the Middle East. Combine all that with already record low consumer confidence and AI job market jitters and I believe we see something substantial break in the next two quarters.

Consumer Price Index (CPI) Charts

Annual CPI Rate by Month

Monthly Seasonally Adjusted Rate

Big Picture and Historical Perspectives

Research Summary and Editorial

Our highest recent year of inflation, 2022, at 8.0%, is far from being the worst in our nation's history, as is claimed by 2024 presidential candidate, and now president, Donald Trump. Data of historical US inflation overwhelmingly refute this claim, which I could characterize as propaganda, or fictional talking point intended to evoke angry emotions among voters through its reckless and constant repetition. While not insignificant to most consumers, we have experienced twenty-seven years in our nation's history with higher inflation, with the worst being almost four times higher at 29.8%. If we consider the detrimental impacts of deflation, there are at least another twenty-four years that had worse price instability, making a total of no less than fifty-one years worse than 2022.

Inflation Explained

Most of us know that high inflation is bad, but deflation (prices decreases) is detrimental. Stable prices, frequently referred to as price stability, is achieved through a balance of supply and demand. There is an expectation in healthy economies of built-in inflation, or a modest rise in prices, typically around 2-3% which both reflects and encourages investor and consumer optimism. Noticeable sudden increases in price are appropriately attributed to push or pull inflation, which respectively refer to increases in production costs being pushed by manufacturers and service providers to the end consumer, or extreme demand being pulled by the consumer. Common causes of inflation include increases in money supply (governments creating more currency) and supply chain disruptions, as are common during wars and also are triggered by the inability to supply enough of a critical commodity, like oil, corn, oranges, and chickens. Deflation frequently occurs when demand drastically decreases, often triggered by recession, and itself can lead to a vicious cycle leading to severe recessions or depressions. In most recent history

The most recent flare of inflation, which was not just a US issue but a worldwide phenomenon, involved both push and pull contributors. For several years between 2020 and 2022, supplies became scarce and eventually costs increased because of factory shutdowns. [Working in supply chain and retail, I can confirm that some major US consumer product groups, those who make the products we buy from the grocery stores struggled to meet demand until 2023 and even 2024.] Wages also increased substantially, which provided another push of increased costs through the system. Meanwhile, in the US alone, $845 Billion, or approximately 6% of total annual consumption was distributed to Americans, of which over 85% were still employed. Granted, many of our lives were disrupted, and many families experienced increased medical costs related to themselves or loved ones. However, most of those funds were distributed to people who did not need it, and for whom it became savings, investment in stocks, home additions, or frivolous consumption. [I believe that making the distributions taxable would have better assured that the funds were spent by only those who needed them most, like the unemployed and those incurring increased medical and care taking expenses; and the rest of us would have returned some or all of the distributions during tax filing instead of buying up products and services that were supply-contrained. This would have removed an enormous amount of pull inflation. Hindsight, however, is 20-20, and so let this be a learning for future disasters, which we hope are few and infrequent.]

So what's good look like? A little inflation is good -- I'll explain. Currently, US economists and central bankers are trying to achieve inflation of around 2%, and 2024 came in at 2.9%. For context, only in 24 of the 250 years of US inflation data was inflation between 1.5% and 2.5%. Average 10, 20, 30, 40, and 50 year annual inflation figures are: 2.9%, 2.6%, 2.5%, 2.8%, and 3.8%, respectively.

Why is a little inflation good? Especially for economies that heavily rely on debt for growth: think housing loans, auto loans, small business loans, education loans, corporate bonds, and government debt. Most of these debts are long term in nature. While the amount of the debt is fixed in an amount when it is secured, the income used to repay the loan is likely to increase at approximately the rate of modest inflation, which makes the loan a lesser burden to the borrower over time.

Imagine the following scenario:

  • A home loan for $100,000 on a $125,000 home, with an annual income of $30,000. A $600 monthly loan payment (not including interest or taxes) represents $7,200 per year, or about 24% of income.

Now let's demonstrate the impact of moderate inflation and moderate deflation:

  1. In 20 years, if inflation and wage increases both averaged 2.5% per year, current annual income would be about $49,500. The annual home loan payment is still $7,200, which is now less than 15% of income. 9% of income (24%-15%), or $4,455 can now be reallocated towards savings, goods, or services that enhance the home owner's standard and quality of life. Furthermore, if the home value appreciated by the same amount, that home would now be worth $205,000, which represents a substantial increase in wealth, or net worth for the owner.
  2. Imagine the same scenario, but with deflation of 2.5%. Income is now $18,000, and the loan payment hasn't changed, making it almost 40% of income, a substantial decrease in standard and quality of life. Furthermore, the home is now worth only $75,000.

Often economic growth and inflation are closely linked. Years of low inflation are not necessarily positive if growth was also very low, or even negative. This is why other metrics such as real GDP, or GDP adjusted for inflation, employment rates, and income and savings should be considered to assess whether the living standards are increasing or decreasing for citizens of an economy.

A Complete US Inflation History 250 Years, 1775-2024

There are also some reliable resources that contain our nation's complete price stability over exactly 250 years, and there are at least four more periods of much higher and prolonged periods of inflation, not to mention a significant number of prolonged periods of deflation.

The inflation of the past four years: 4.7%, 8.0%, 4.1%, and 2.9%, rank 48th, 28th, 58th, and 78th highest. The highest year of inflation doesn't rank in the top 10% of our nation's history, and the highest year of inflation was nearly four times higher at 29.8%. There have been an additional 24 years deflation of 5% or more, which arguably were worse for our economy and price stability than the recent four years, which would re-rank them 72nd, 52nd, 82nd, and 102nd worst years for price stability, between right in the middle to a little on the high side. Definitely not resembling "worst in our nation's history."


The recent inflation we experienced, while not without pain to the which peaked in 2022, was insignificant relative to our nation's inflation history. Compared to the experiences of our forefathers, I'm embarrassed to think of recent years as a hardship. Perhaps, we have become soft and spoiled as to how great our nation and our modern times are?

111 Years of BLS Inflation History, 1914-2024

When comparing the 8.0% inflation of 2022 to 111 years of recent inflation data, there were twelve years during which inflation was higher. Two of those years had inflation more than double, at 17.8% and 17.3%. There were also five years during which we experienced deflation greater than 5%, all during severe depressions of 1921 and 1931. In total, there were seventeen years where price stability was worse, or far worse than our recent experience with inflation.

The inflation of the past four years: 4.7%, 8.0%, 4.1%, and 2.9%, rank 28, 13, 33, and 50. Recent price instability are hardly noticeable, when compared to the inflation experienced during the two world wars, the persistent inflation in the 1970s and 1980s, and the extreme deflation during the early 1920s and early 1930s.




Sources

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