The shrinking dollar: what $100 in 1913 is worth today

A century of the dollar losing ground

Inflation feels abstract until you compound it. A few percent a year sounds harmless, but stack 113 years of it and the dollar loses roughly 97% of its purchasing power. The curve above is the same CPI that sits behind the inflation calculator, plotted as the running cost of a fixed 1913 basket. It is nearly flat for decades, then bends up hard: the two world wars, the 1970s oil shocks and the early-1980s peak did most of the damage, when double-digit inflation compounded on itself.

The aspect in which people overlook is prices fell in the past and quite drastically. In 1921 there was an index drop of 10.5% and during the first three years of the early 1930's there were three consecutive years of deflation due to the fact that the depression greatly reduced consumer demand. Falling prices may seem like a positive development but typically this type of decline occurs in conjunction with high levels of unemployment. Since the war however, the direction of price movement has generally been upward; either at a slow or moderate rate and on occasion rapidly. Consequently, for individuals who are savers their task has been to out run price inflation as opposed to avoiding it.

A caveat worth stating. The CPI tracks a fixed basket, and what people actually buy changes, so no single index captures every household's experience; your own inflation depends on rent, fuel and the things you spend the most on. Treat these figures as the official yardstick, not a personal one. To run your own numbers, use the inflation calculator or check whether a raise kept up with the real wage calculator. For the full year-by-year table this chart is built from, see historical US inflation rates.