Tom's Inflation Calculator FAQ

Functionally, the two versions of the Inflation Calculator have several differences. Apart from appearances, the main difference is that the Java version includes five data sets, whereas the JavaScript version has only two. Both calculators default to the Consumer Price Index for All Urban Consumers (CPI-U, Annual Average). The Java version also has the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers (CPI-W), U.S. Medical Cost Inflation (a CPI component), CPI-U (December to December instead of Annual Average), and ShadowStats (a private-sector source). But the JavaScript version has a data set not found in the Java version: the Social Security Wage Index. Another difference is that the Java version can display all the annual inflation rates in each data set.

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What can Tom's Inflation Calculator do, and what can't it do?

Tom's Inflation Calculator converts U.S. dollars between two different years, adjusting the dollars for inflation (or deflation). Over time, wages and prices tend to rise, making direct comparisons between two years difficult. Past prices seem cheaper, but past wages were lower, too. Today's inflated dollars just don't buy as much stuff as past dollars did. Tom's Inflation Calculator adjusts for these differences, allowing you to make roughly equivalent comparisons of wages and prices between two years.

It's not an investment calculator. You can't use it to calculate how an investment will grow over time. However, you can use it as a companion with an investment calculator. First, use the investment calculator to estimate how large your savings will grow in the future. Then use the Inflation Calculator to estimate the actual purchasing power of that sum, as expressed in today's dollars. (See: How can I use the calculator to forecast future inflation?)

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Why won't the calculator run on my computer?

The original version of Tom's Inflation Calculator is a special type of computer program known as a Java applet. When you view the Inflation Calculator page in your web browser, the applet should download and run automatically. (Downloading takes a few moments, depending on the speed of your Internet connection.) If the applet doesn't run, the most common reason is that Java isn't installed on your computer. Try downloading and installing the latest version of Oracle's Java Runtime Environment. If you download Java from that source, it's free and will not put malware or spyware on your computer.

If Java is already installed but the applet still doesn't run, another common problem is that Java has been disabled for security reasons. Java applets are almost always safe to run, but some browsers (especially on corporate PCs) enforce unnecessarily high security settings. When using Microsoft Internet Explorer, pull down the Tools menu and select Internet Options. Click the Security tab, then click the Custom Level button. Under the Java VM section, select "High safety." This should allow the Java applet to run while preserving strong security.

Another potential problem is that Java is installed but isn't registered with the web browser. With Internet Explorer, pull down the Tools menu and select Internet Options. Click the Advanced tab. Scroll down and check the box labeled "Use JRE 1.6.0_15 for [applet] (requires restart)." (The Java version number may be different on your system.) You must restart Internet Explorer for this change to take effect.

Another alternative is to bypass the Java version of the calculator and use the JavaScript version instead. Almost all web browsers will run it without installing any plug-ins, unless scripts are disabled in the browser for strict security reasons. The two versions of the calculator are similar but have a few differences, as noted above.

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How can I use the calculator to convert wages or prices from past years into equivalent dollar amounts today?

Type the wage or price from a past year into the Dollar Amount field. Type the year for that wage or price into the Starting Year field. Type the current year into the Target Year field. (Note: some data sets don't allow you to target the current year because the inflation data isn't available yet; the default data set uses a forecast for the current year.) Now click the Calculate button. The answer appears in the Converted Amount field.

For example, let's say you were making $25,000 a year in 2000. Have your wages kept pace with price inflation over the last 12 years?

To find out, start with the default data set (U.S. Price Inflation, CPI-U, Annual Average):
Enter 25,000 in the Dollar Amount field.
Enter 2000 in the Starting Year field.
Enter 2013 in the Target Year field.
Click the Calculate button.

The answer—in this case, $33,805.56—appears in the Converted Amount field. If your current salary is less than that amount, you haven't kept up with general price inflation. Time for a raise!

If you are a clerical or hourly-wage worker, you can repeat this calculation using the alternative CPI-W data, which attempts to track your typical purchases more closely. (This data set is available only in the Java version of the calculator.) Click the Options button to choose "U.S. Price Inflation (CPI-W)", then click OK. Next, change the target year to 2012, because the government has not yet released inflation data for 2013. (The previous example used forecast data for 2013.) Now click the Calculate button again. The answer should be $33,496.02.

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How can I use the calculator to convert today's wages and prices into equivalent dollar amounts for past years?

Type the wage or price from this year into the Dollar Amount field. Type this year into the Starting Year field. (Note: some data sets don't allow you to start with the current year because the inflation data isn't available yet; the default data set uses a forecast for the current year.) Type the past year to which you want to convert this wage or price into the Target Year field. Click the Calculate button. The answer appears in the Converted Amount field.

For example, suppose you just paid $3.50 for a gallon of regular gasoline. Somebody tells you that gasoline cost only 50 cents a gallon in 1975. But was gasoline really cheaper back then, after allowing for inflation?

To find out, use the default data set: U.S. Price Inflation (CPI-U, Annual Average). The currently selected data set is always indicated below the row of Inflation Calculator buttons. You can change it by clicking the Options button.
Enter 3.50 in the Dollar Amount field.
Enter 2013 in the Starting Year field.
Enter 1975 in the Target Year field.
Click on the Calculate button.

The answer—in this case, $0.80—appears in the Converted Amount field. Of course, 80 cents is more than 50 cents, so the $3.50 gasoline you bought in 2013 is more expensive than the 50-cent gasoline in 1975, after adjusting for inflation.

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How can I use the calculator to forecast future inflation?

Choose this data set: "U.S. Price Inflation (CPI-U, Annual Average)." It's the only data set with forecasts of inflation rates into the future. It's also the default data set when the Inflation Calculator first runs. (In the Java version of the calculator, the active data set is always indicated by the label below the row of buttons at the bottom of the calculator. In the JavaScript version, the selection buttons indicate the active data set.)

You can use this data set to estimate the effects of inflation as far forward as the year 2100. Of course, these forecasts are speculation. For the current year through 2022, the forecasts are from the Congressional Budget Office, a nonpartisan source. After that, the calculator automatically computes the mean average inflation rate since the U.S. government began gathering these statistics in 1913. In 2013, that average annual rate is 3.33%.

If you have used someone else's investment calculator to estimate how your savings will grow, you can enter those amounts into my Inflation Calculator to estimate the inflation-adjusted value of those future dollars. (My thanks to Penelope Reznor and Kodi Wolf for suggesting this feature.)

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What does the "Options" button in the Java version do?

This button lets you change the inflation data that the calculator uses for its arithmetic. It also lets you change the appearance of answers in the Converted Amount field by turning dollar-and-cents formatting on or off. The default setting is on.

Clicking on the Options button opens the Inflation Calc Options window. Here, you can choose from five different data sets. When the calculator first runs, the default data set is "U.S. Price Inflation (CPI-U, Annual Average)." Use this data to see how inflation is affecting the retail prices of goods and services.

Another data set is "U.S. Price Inflation (CPI-W)." If you are a clerical or hourly-wage worker, this data is supposed to reflect your purchases more accurately.

All data sets let you perform calculations forward or backward in time, for any years within the range of their data.

For most purposes, the default "U.S. Price Inflation (CPI-U, Annual Average)" data set is sufficient. The others are more specialized. Below is more information about them:

U.S. Price Inflation (CPI-U, Annual Average): This measure of inflation is often quoted in news stories and is the basis for cost-of-living adjustments (COLAs) by Social Security and many union contracts. It's also known as the Consumer Price Index (CPI) for All Urban Consumers (CPI-U). It represents the annual average of monthly inflation rates in a calendar year. It's based on retail goods and services purchased by about 87 percent of the U.S. population. This is the default data set in Tom's Inflation Calculator.

U.S. Price Inflation (CPI-W): This data set is the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers (CPI-W). It's a subset of the CPI-U that includes clerical and hourly-wage workers, or about 37 percent of the U.S. population. If you are such a worker, this data is supposed to reflect your purchases more closely. Also, note that one proposal for reforming Social Security is to tie the annual COLAs to CPI-W inflation for lower-income recipients, and tie the COLAs to CPI-U inflation for higher-income recipients. My Inflation Calculator lets you compare these two inflation rates.

U.S. Medical Cost Inflation: This data set calculates U.S. medical cost inflation since 1935. It's actually part of the overall CPI-U. (My thanks to Sam Baker for suggesting this addition.) To use this data set, click the Options button and choose it in the Inflation Calc Options window. Please note that this data set tracks the inflation of actual medical costs, not the inflation of health-insurance premiums, which rise faster than medical costs.

U.S. Price Inflation, (CPI-U, December to December): New since version 7.1 is a data set for calculating U.S. retail price inflation using the government's December-to-December data instead of annual average data. The difference is subtle. The December-to-December data compares retail prices in December of a given year with retail prices exactly one year earlier. The annual average data is the mean average of inflation rates for all 12 months in a calendar year.

Over time, the difference between these two inflation rates rarely matters. However, my Inflation Calculator now includes the December-to-December data because some news stories refer to it, and occasionally, people ask why the inflation rates in my program seem to vary from those they heard about elsewhere. For example, in 2009, the annual average inflation rate was -0.4% (actually, deflation), whereas the December-to-December inflation rate was +2.7%.

The annual average rate is used more widely, so my program defaults to it. The December-to-December data is available by clicking the Options button and selecting the data set in the Inflation Calc Options window. Note that this data covers only the years 1913 to present, unlike the annual average data, which covers the years 1665 to 2100.

U.S. Price Inflation, ShadowStats: New since version 7.2 is a data set for calculating U.S. retail price inflation using statistics not compiled by the U.S. government. Instead, this data set is provided with the permission of ShadowStats, a private company. (My thanks to ShadowStats author John Williams for his cooperation.)
ShadowStats data is an alternative to the official inflation data from the U.S. Bureau of Labor Statistics. ShadowStats claims to make a more accurate estimate of inflation. In general, ShadowStats says that actual inflation is much higher than the government's official statistics. Although the ShadowStats inflation seems much higher than the inflation in my personal experience, some people want an alternative to the U.S. government data. ShadowStats data is proprietary and copyrighted. Although ShadowStats has kindly granted me permission to use some of its data in my Inflation Calculator, my program is not permitted to display the data. For information about ShadowStats, see www.shadowstats.com.
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What does the "Show Rates" button in the Java version do?
You can see inflation rate percentages by clicking the Show Rates button. If the inflation percentage is a negative number, it indicates deflation for that year.
ShadowStats alternative inflation data is proprietary and cannot be displayed by my program.

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What is the "cumulative inflation rate" in the Java version?
The window that appears after clicking the Show Rates button also displays the cumulative inflation rate for the range of years selected. This is the total amount of inflation for that period. (Thanks to Cy Coleman for suggesting this feature.)
Note that cumulative inflation is derived iteratively, not merely by summing the inflation percentages for each year. For example, assume we have two successive years with 10% inflation per year. Something that costs $1.00 before inflation would cost $1.10 after the first year:
1.00 x 0.10 + 1.00 = 1.10
After the second year of 10% inflation, it would cost $1.21:
1.10 x 0.10 + 1.10 = 1.21
So the cumulative inflation rate for those two years would be 21%, not 20%, because 1.21 is 21% greater than 1.00.
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Why don't the calculator's inflation rates match the rates I've seen elsewhere?
There are many ways to measure inflation. When Tom's Inflation Calculator first runs, it defaults to the most common measure: "U.S. Price Inflation (CPI-U, Annual Average)." This is the Consumer Price Index for All Urban Consumers (CPI-U). It is the mean average of monthly inflation rates during a given year.
Another common measure is the December-to-December inflation rate. It compares prices from December 31 of one year to prices from December 31 of the previous year. Over many years, it varies little from the CPI-U Annual Average rate.
You don't have to use the default data set. The Java version of Tom's Inflation Calculator lets you choose from five different inflation-rate data sets, and the JavaScript version lets you choose from two data sets. See: What does the "Options" button in the Java version do?
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Why are the medical-cost inflation rates much lower than the rates I've seen elsewhere?
The "Medical-Cost Inflation" data set (Java version only) tracks actual medical costs, not the inflation of health-insurance premiums, which are rising faster than medical costs. There are various explanations for the disparity—beyond the scope of this FAQ.
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What is the source of data that the calculator uses?
My programs use inflation data from several sources, including Global Financial Data, Economic History Services, the U.S. Bureau of Labor Statistics, the Congressional Budget Office, the Social Security Administration, and ShadowStats.
The most widely quoted inflation rate is the U.S. government's Consumer Price Index (CPI), 1913 to present, as compiled by the U.S. Bureau of Labor Statistics. By default, my Inflation Calculator uses the CPI-U data (CPI for All Urban Consumers), not seasonally adjusted (data series CUUR0000SA0). Data before 1913 was mostly reconstructed by economists from old records and is less reliable. The CPI-W data (CPI for Urban Wage Earners and Clerical Workers) is also from the U.S. Bureau of Labor Statistics, 1913 to present (data series CWUR0000SA0). The medical-cost data is a subset of the government's CPI but has been tracked only since 1935 (data series CUUR0000SAM). The CPI-U December-to-December retail inflation is also from the U.S. Bureau of Labor Statistics and extends from 1913 to present (data series CUUR0000SA0). The Social Security Wage Index in the JavaScript version of my calculator is sourced from the Social Security Administration. The ShadowStats retail-inflation data is from a private company, not the U.S. government.
Retail inflation rates for future years through 2022 are forecasts from the Congressional Budget Office, a nonpartisan source. Inflation rates for years beyond 2022 are the average annual inflation rate since the U.S. government began gathering inflation data in 1913.
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What if I don't trust the government's official inflation data?
Try using this alternative data set: "U.S. Price Inflation (� ShadowStats)" [Java version only]. This data is from a private source that believes the U.S. government consistently understates actual inflation.
Some people believe the U.S. government deliberately distorts its inflation data for various reasons. For instance, some Social Security retirees believe they are cheated out of larger cost-of-living adjustments because the government understates the Consumer Price Index (CPI), which is the basis for adjusting Social Security benefits. Other people assert that the government overstates the CPI. People who occasionally write to me on this subject never provide data to support their claims.
To address at least some of their concerns, Tom's Inflation Calculator now includes an alternative data set from ShadowStats, a private company. For more information about this data, see ShadowStats.com. My thanks to ShadowStats for permitting me to use its data as an alternative in my Inflation Calculator.
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Why do I sometimes see an error message in the Java version that says "Answer Too Large"?
If you enter a very large number to convert, the result may not fit in the answer field and the program will say "ANSWER TOO LARGE." But you can still obtain an answer by switching off the "Format Raw Answers As Dollars And Cents" checkbox in the options window. The raw answer will be in scientific notation. You can also switch off this option to see if the raw answer includes fractions of pennies. The calculator truncates raw answers instead of rounding.
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Why can't the calculator adjust inflation for different months during the same year?
Tom's Inflation Calculator uses annual inflation data, not monthly inflation data. Adding monthly data would make the program much larger (taking longer to download) and would not be useful for calculations spanning several years. Also, I don't want to bother making updates every month!
If you want to make monthly calculations within a year, try using the U.S. Bureau of Labor Statistics inflation calculator. It uses the same CPI-U (annual average) data that my Inflation Calculator uses by default, but it includes the latest monthly inflation data.
For my calculator, I update the data only once a year (in January), when the data is more settled. (The government sometimes revises its monthly inflation data.) When converting between other years, rounding errors during calculations may cause insignificant differences between the answers from my calculator and the BLS calculator.
Note that the BLS calculator covers only the years 1913 to present. Unlike my calculator, it doesn't include historical data going back to 1665 or forecasts to 2100. Nor does it have alternative data sets.
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Why doesn't the calculator include the starting year when making calculations?
The target year's inflation rate is the inflation since the previous year. For instance, if you calculate inflation from 2011 to 2012, the program uses the 2012 inflation rate. If you calculate inflation from 1990 to 2012, the program uses the inflation rates for 1991 to 2012.
This program uses only annual inflation data, not monthly data, so it has a worst-case error of 12 months and an average error of 6 months. In the worst case, it will overstate the actual inflation by 12 months if your starting date is December 31 and your target date is January 1. To the program, a year has passed, but a year's worth of inflation doesn't happen overnight.
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Where can I send feedback about Tom's Inflation Calculator?
Your feedback is welcome. Click here for the contact page.
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What does the "Show Rates" button in the Java version do?

What is the "cumulative inflation rate" in the Java version?

Why don't the calculator's inflation rates match the rates I've seen elsewhere?

Why are the medical-cost inflation rates much lower than the rates I've seen elsewhere?

What is the source of data that the calculator uses?

What if I don't trust the government's official inflation data?

Why do I sometimes see an error message in the Java version that says "Answer Too Large"?

Why can't the calculator adjust inflation for different months during the same year?

Why doesn't the calculator include the starting year when making calculations?

Where can I send feedback about Tom's Inflation Calculator?

Tom's Inflation Calculator
Frequently Asked Questions

What is the difference between the Java and JavaScript versions of Tom's Inflation Calculator?

What can Tom's Inflation Calculator do, and what can't it do?

Why won't the calculator run on my computer?

How can I use the calculator to convert wages or prices from past years into equivalent dollar amounts today?

How can I use the calculator to convert today's wages and prices into equivalent dollar amounts for past years?

How can I use the calculator to forecast future inflation?

What does the "Options" button in the Java version do?

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Tom's Inflation Calculator Frequently Asked Questions

What is the difference between the Java and JavaScript versions of Tom's Inflation Calculator?

Tom's Inflation Calculator
Frequently Asked Questions