“Back in my day, this cost a dollar” is one of the oldest lines in family conversation, and it is usually true. Prices rise over time, so a dollar from the year you were born would buy much more than a dollar does now. Putting an exact figure on that difference is surprisingly easy once you know where the data comes from. This guide explains how the United States measures inflation with the Consumer Price Index, gives you the one formula you need to convert any old price into today’s money, shows what a dollar from each decade is worth now, and explains what the index leaves out.
What the Consumer Price Index is
The Consumer Price Index, or CPI, is a measure of how the prices paid by households change over time. It is produced every month by the US Bureau of Labor Statistics, which sends data collectors to record the prices of tens of thousands of items in shops, rental homes and service businesses across the country, and also gathers prices online. Those prices are combined into a single index using weights that reflect how households actually spend their money, based on large national spending surveys.
The most widely quoted version is the CPI for All Urban Consumers, known as CPI-U, which covers the spending of the large majority of the US population who live in or near cities. Its value is set to 100 for the average of 1982 to 1984, so a reading of 200 means prices are twice what they were in the early 1980s. In September 2026 it stood at about 337, meaning prices were more than three times their early-1980s level. Housing costs are the largest single part of the basket, followed by transport and food.
The conversion formula
Because the CPI is an index, converting an old price to today’s money is a single ratio. Divide today’s CPI by the CPI for the year of the old price, and multiply the old price by the result.
- Find the CPI for the old year. Annual averages are the simplest to use. For 1990, the CPI-U average was 130.7.
- Find the latest CPI. For September 2026, it was 336.9.
- Divide and multiply. Today’s value = old price × (CPI now ÷ CPI then).
Worked example. Someone born in 1990 is given a $50 birthday gift. In September 2026 money that is $50 × (336.9 ÷ 130.7), which comes to about $128.94. Going the other way, $50 today would have had the buying power of about $19.39 in 1990.
The same ratio tells you the total inflation between two dates. Prices in September 2026 were about 2.58 times their 1990 average, which means prices rose by about 158 per cent over that period. Turned around, a dollar today buys about 39 per cent of what it bought in 1990.
A dollar through the decades
The table shows what one dollar from the start of each decade is worth in September 2026 dollars, and how many cents of that year’s money today’s dollar is equivalent to. The figures use annual average CPI for each year.
| Year | CPI-U (average) | $1 then is worth today | $1 today was worth then |
|---|---|---|---|
| 1920 | 20.0 | $16.81 | 6¢ |
| 1930 | 16.7 | $20.18 | 5¢ |
| 1940 | 14.0 | $24.05 | 4¢ |
| 1950 | 24.1 | $14.00 | 7¢ |
| 1960 | 29.6 | $11.39 | 9¢ |
| 1970 | 38.8 | $8.68 | 12¢ |
| 1980 | 82.4 | $4.09 | 24¢ |
| 1990 | 130.7 | $2.58 | 39¢ |
| 2000 | 172.2 | $1.96 | 51¢ |
| 2010 | 218.1 | $1.55 | 65¢ |
| 2020 | 258.8 | $1.30 | 77¢ |
The biggest jumps come in the 1970s. A dollar from 1970 is worth about $8.68 today, but a dollar from 1980 only about $4.09, because prices more than doubled during that single decade. By contrast, the 2010s were a calm decade for prices, and a dollar from 2010 is worth about $1.55 today.
Inflation’s ups and downs
Inflation has not been steady. In the early 1930s, during the Great Depression, prices actually fell: the yearly average CPI dropped by about 10 per cent in 1932 alone. The Second World War and the years just after it brought sharp rises. The 1950s and early 1960s were relatively calm. Then, from the late 1960s, inflation climbed, driven by oil price shocks and other pressures, peaking in 1980 when yearly average prices rose about 13.5 per cent. The Federal Reserve raised interest rates steeply to bring it down, and for most of the following four decades inflation stayed low, typically around two to three per cent a year.
Prices even dipped slightly in 2009, after the financial crisis, by about 0.4 per cent on a yearly basis. The calm ended after the pandemic, when supply problems, strong demand and energy prices pushed inflation to its highest level in four decades: the yearly average rose about 8.0 per cent in 2022. Inflation has since slowed, but prices did not fall back, which is why a dollar from 2020 is now worth about $1.30.
What the CPI does not capture
The CPI is the best general measure of US inflation, but it is an average, and averages can hide a lot. The basket reflects typical urban spending, so a household that spends much more than average on rent, childcare or health care may feel inflation running faster than the official number, and one that owns its home outright may feel it running slower. Prices also vary from place to place, and the national index does not tell you how much costs have risen in your own city.
Quality is another challenge. A television or a car from 1990 is very different from one sold today, and the Bureau of Labor Statistics adjusts for improvements in quality so that it measures the price of the same thing rather than the price of a better thing. People can reasonably disagree about how well that works. Some goods that matter a great deal today, such as smartphones and streaming services, did not exist at all in earlier decades, so comparisons of what money could buy “then and now” are always partly a comparison of different worlds.
There are also several versions of the index. Besides CPI-U, the Bureau publishes a version for wage earners, CPI-W, which is used to set annual cost-of-living increases for Social Security, and a “chained” CPI that allows for people switching between products when prices change, which tends to show slightly lower inflation. For long historical comparisons back to 1913, CPI-U is the standard choice, which is why our calculators use it.
Using the numbers well
Inflation adjustment is most useful for comparing like with like: what a salary, a house price or a weekly shop from a past year means in today’s money. It is less useful for single items whose prices behave differently from the average. College tuition and medical care have risen much faster than the CPI for decades, while many electronics and clothes have become cheaper in real terms. If you want to know whether something has really become more expensive, compare its price change with the CPI over the same period.
It is also worth remembering that wages have risen over the same period, so higher prices do not automatically mean people are worse off. A fair comparison of living standards looks at prices and incomes together. For a personal angle, our prices then and now calculator converts any amount from your birth year into today’s money, and the born the same year and you versus technology calculators show what else has changed since then.
Questions people ask
How much is $1 from 1990 worth today?
About $2.58 in September 2026 dollars, using the US Consumer Price Index. Put the other way round, a dollar today buys roughly what 39 cents bought in 1990.
What is the formula to adjust a price for inflation?
Multiply the old price by the CPI for the later date and divide by the CPI for the earlier date. Today’s value = old price × (CPI now ÷ CPI then).
Is the CPI the same as the cost of living?
Not exactly. The CPI tracks the prices of a fixed basket of goods and services bought by typical urban households. Your personal cost of living depends on what you actually buy and where you live, so it can rise faster or slower than the index.
Has the US ever had deflation?
Yes. Prices fell sharply in the early 1930s during the Great Depression, by about 10 per cent in 1932 alone on a yearly-average basis, and they dipped slightly in 2009 after the financial crisis.
Where does the CPI data come from?
The US Bureau of Labor Statistics collects prices every month and publishes the index. Our figures use the all-items CPI-U series as published through the Federal Reserve Bank of St. Louis.
Sources. US Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (CPI-U), all items, not seasonally adjusted, 1982–84 = 100, via the Federal Reserve Bank of St. Louis (FRED series CPIAUCNS); annual averages, with September 2026 as the latest month; BLS Handbook of Methods, Consumer Price Index.