Inflation Rates by Year

Even though economics is an intricate subject, difficult for the layman to grasp, it does play a crucial role in our life. We might not take a note of various terms that appear in financial dailies, but they do affect us directly or indirectly, every once in a while. One such economics term which makes it to the front page almost every other day is inflation - a rise in price level which results in various other effects on our financial condition. In the United States, inflation has been fluctuating between 1 and 3 percent over the last decade. However, the US economy has witnessed inflation as high as 13.58 percent and as low as 1.02 percent in the past.

Inflation: Definition

Inflation is defined as an increase in the price levels of goods and services in an economy over a stipulated period of time. This increase, in turn, diminishes the purchasing power of currency, owing to which each dollar buys lesser goods and services. There exist different types of inflation, each with a different trigger factor of its own. High rates of inflation, also referred to as hyperinflation, can be attributed to excessive growth in money supply, while low and moderate inflation occurs as a result of fluctuating demand for goods and services or fluctuations in available supplies. Among the various negative effects of inflation, the most prominent one is the fact that it decreases the real value of money. Any uncertainty about the future of inflation can trigger chaos in the economy, thus discouraging people to invest or save.

Inflation rate is a measure of inflation prevailing in the economy, calculated over a stipulated period of time - mostly a year. It is defined as the rate of change of prices as indicated by the comsumer price index. Basically, there are two methods by which you can calculate the rate of inflation - first by using a base period and second by using 'chained' measurements. In an economy, inflation rate monitoring is quite important as it acts as a tool for weighing the value of currency.

Inflation Rates by Year: United States

Given below is a table of annual inflation rates for the United States for a period of 50 years (1960 to 2010).

Year	Inflation Rate (%)
1960	1.46
1961	1.07
1962	1.2
1963	1.24
1964	1.28
1965	1.59
1966	3.01
1967	2.78
1968	4.27
1969	5.46
1970	5.84
1971	4.3
1972	3.27
1973	6.16
1974	11.03
1975	9.2
1976	5.75
1977	6.5
1978	7.62
1979	11.22
1980	13.58
1981	10.35
1982	6.16
1983	3.22
1984	4.3
1985	3.55
1986	1.91
1987	3.66
1988	4.08
1989	4.83
1990	5.39
1991	4.25
1992	3.03
1993	2.96
1994	2.61
1995	2.81
1996	2.93
1997	2.34
1998	1.55
1999	2.19
2000	3.38
2001	2.83
2002	1.59
2003	2.27
2004	2.68
2005	3.39
2006	3.24
2007	2.85
2008	3.85
2009	-0.34

It is virtually impossible to point out a single cause of inflation, as this phenomenon is triggered by series of events in the economy. Directly or indirectly, inflation affects the economy, and we being a part of the economy have to be well-versed with this concept. If you are not yet convinced that you have to be worried about inflation and its implications, you need to understand one basic fact - when inflation occurs you will have to pay more for the same standard of life that you follow today.