US Inflation

From Ameri*Metrics


Using Data Updated with March 2026 data as of: April 15, 2026

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

Recent Data and Perspectives

Research Summary and Editorial

Is inflation about to blow up and follow the 1970s-1980s pattern?

It is hard to ignore the sudden drop in hiring and sudden spike in inflation that coincided with the introduction of Trump Republican tariffs and subsequently the unprovoked and very unpopular Iranian offensive.

In fact, Trump's approval ratings are bouncing along all-time lows, and to quote a popular political quote, "it's the economy, Stupid."

My key call-outs from the chart below, which compares month-to-month inflation in the 1970s to that of the 2020s:

  • The inflation we are experiencing today is roughly half of what Americans endured in the 1970s and 1980s. Yet many political leaders have used outright falsehoods such as "never been seen before" to inflame public anger. It is unfortunate how furious and divided Americans have become over an inflation episode that is historically mild. Compared to what previous generations endured, our reaction reflects how intellectually unprepared we are to process truth and economic context.
  • Inflation in the 1970s is often blamed on Jimmy Carter, but the data show that the first wave occurred under Republicans Nixon and Ford, driven primarily by the 1973–74 oil embargo.
  • The second wave of inflation is widely attributed to Federal Reserve policy failures under Chair Arthur Burns, followed by the painful but ultimately successful rate hikes under Paul Volcker, which finally broke the inflation cycle.
  • It is intellectually dishonest to attribute the inflation of 2021 to "Democratic policies." After the deep 2020 recession, the U.S. economy experienced its fastest real GDP growth since 1984 — about 6% after inflation (and roughly 11% including inflation). The first round of inflation was driven by this extraordinary surge in consumption and investment while major industries were still constrained by multi-year supply chain disruptions, including prolonged factory shutdowns in China. To blame this inflation on "food stamps," "welfare programs," or "illegal immigration" is an economic misunderstanding of the highest order as well as blind prescription to fictitious political narratives.
  • The big question we must ask ourselves is this: as tariffs and war push prices higher, while Trump simultaneously demands lower interest rates, are we setting ourselves up to repeat the double-spike inflation pattern of the 1970s?


Data Source is Quarterly GDP Release from U.S. Bureau of Economic Analysis (BEA)

March 2026 CPI & PPI -- hottest headline numbers in years.

PPI -- the cause of the weakest non-recession jobs market in 23 years?

My Substack -- The US has a Business Inflation Problem

Personal Consumption Expenditures (PCE) Chart

Annual PCE Rate by Month

Consumer Price Index (CPI) and Producer Price Index (PPI) Charts

Annual CPI Rate by Month

Annual CPI and PPI Rate by Month

Monthly PPI Annual Rate

Annual PPI 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 insurance 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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