Value of $100 in 2012, adjusted to 2020

What happened to prices between 2012 and 2020

Between 2012 and 2020, the Consumer Price Index went from 229.594 to 258.811. Cumulatively, prices increased 12.7%, which works out to an average of 1.51% per year. Put differently, a dollar in 2012 bought what $0.89 buys in 2020: the 2012 dollar lost 11.3% of its purchasing power over these 8 years.

2012 put a number on what the Federal Reserve was aiming for. In January the Fed announced a 2% inflation target, and consumer prices rose 2.1% for the year, almost exactly on it. Gasoline averaged $3.62 a gallon, another annual high, but the pace of increase cooled from 2011’s 3.2% as food and core prices grew more slowly.

The bigger story was housing and jobs. Home prices began to recover, and the median new home sold for about $245,200, up from $227,200 the year before. Median household income was $51,017. The federal minimum wage held at $7.25, and a first-class stamp rose to 45 cents.

In September the Fed started a third round of asset purchases, this one with no fixed end date, aimed at lowering unemployment. Overseas, the European Central Bank’s July pledge to do “whatever it takes” to save the euro calmed bond markets. A summer drought across the Midwest drove corn and soybean prices to records, a shock that reached grocery shelves only partly, because most of what shoppers pay for food covers processing and transport rather than raw crops.

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The destination year: 2020

In 2020, prices rose 1.2% and $100 from 2012 had the buying power of $113; the year's average CPI of 258.811 is the level behind every 2020 figure on this page.

2020 was the year the pandemic rewired the price data without triggering the inflation spike that followed it. Consumer prices rose just 1.2% for the year, the mildest pace since 2015, as COVID-19 lockdowns emptied roads, closed airports, and crushed energy demand. Oil told the starkest story: on April 20, U.S. crude futures fell to about negative $37 a barrel, the first negative settlement in the market’s history, as storage capacity ran out and no one wanted the physical barrels. Gasoline followed it down, falling to about $1.80 a gallon nationally that month before recovering to average $2.17 for the year. Grocery prices moved the other way: pantry stocking and meatpacking-plant disruptions pushed food-at-home costs up faster than usual, a rare case of food and energy pulling the index in opposite directions. Washington answered with the $2.2 trillion CARES Act, signed March 27, which sent $1,200 payments to most adults and added $600 a week to unemployment benefits as states ordered widespread business closures. The Federal Reserve cut its policy rate to near zero in two emergency moves that same month and pledged to buy Treasury and mortgage bonds “in the amounts needed” to keep credit markets working, an open-ended commitment beyond even its 2008 response. None of it showed up in the CPI yet: the stimulus, the supply shocks, and the reopening whiplash that followed would build into the fastest inflation in four decades over the next two years.

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