What Is the Typical Rate of Inflation?
The inflation rate of the U.S. is measured each year to gauge the general rise in prices for goods and services against the previous year. The Bureau of Labor Statistics indicates the typical inflation rate does not include taxation and investment information, but measures eight categories of goods, including food and housing costs.
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Average Rate
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Trading Economics reports the average annual inflation rate in the U.S. between 1914 and 2010 was 3.38 percent. The record high inflation rate was recorded in June 1920 at 23.7 percent; the record low in June 1921 was negative 15.8 percent. Forecast-Chart.com calculates the annual inflation rate for the 12 months leading up to September 2010 was 1.14 percent.
Costs Measured
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The U.S. uses its Consumer Price Index to calculate the inflation rate. The index measures the average cost paid in a year by an typical urban household for a "basket" of goods and services. These include food, housing, clothing, transportation, medical care, education and communication, recreation, and personal items and services.
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Calculations
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The Measuring Worth website explains how to calculate the inflation rate for a given year: divide the CPI for that year by the CPI for the previous year; multiply the resulting number by 100 to get the final inflation rate figure.
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