Inflation fell to 2.8% in 2001 from 3.4% the year before, as a recession that began in March cut demand and gasoline slid to an average of $1.46 a gallon. The median household earned about $42,200, roughly flat from 2000, and a new home cost about $175,200. The Federal Reserve cut its policy rate 11 times over the year, from 6.5% to 1.75%, the lowest since 1961. After the September 11 attacks, U.S. stock markets closed for four trading days, and air travel dropped sharply until the following year. Congress had already passed a $1.35 trillion tax cut in June, which included rebate checks of up to $600. The National Bureau of Economic Research dates the recession’s end at November, but unemployment kept rising into 2003. A first-class stamp went to 34 cents in January, and the federal minimum wage stayed at $5.15. The Fed’s cuts were the first step in a long period of very cheap borrowing that would fuel the housing boom.
Year in review
Inflation in 2001
The U.S. inflation rate in 2001 was 2.8% (CPI: 177.1). Convert 2001 dollars to today →
2.8% 2001 inflation rate
2.6% 2000s average
3.7% peak month (Jan)
1.6% lowest month (Dec)
What things cost in 2001
In 2001, the median household income was $42,228, and a gallon of gas cost $1.46.
| Median household income | $42,228 |
|---|---|
| Gas (per gallon) | $1.46 |
| Median home price | $175,200 |
| First-class stamp | $0.34 |
| Federal minimum wage | $5.15 |
What $100 from 2001 was worth later
$100 from 2001 had the buying power of $188 by 2026; each milestone links to that conversion.
| In 2010 | $123 |
|---|---|
| In 2020 | $146 |
| In 2026 | $188 |
Inflation in 2001, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 175.1 | 3.7% |
| February | 175.8 | 3.5% |
| March | 176.2 | 2.9% |
| April | 176.9 | 3.3% |
| May | 177.7 | 3.6% |
| June | 178 | 3.2% |
| July | 177.5 | 2.7% |
| August | 177.5 | 2.7% |
| September | 178.3 | 2.6% |
| October | 177.7 | 2.1% |
| November | 177.4 | 1.9% |
| December | 176.7 | 1.6% |
Economic events of 2001
A recession runs from March to November; prices rose 2.8% that year.
- A recession runs from March to November The National Bureau of Economic Research dated the downturn at eight months. It was mild by postwar standards, but unemployment rose from 4.2% in January to 5.7% in December as the dot-com collapse spread into business investment.
- The September 11 attacks close markets and hit air travel U.S. stock exchanges stayed shut for four trading days, the longest closure since 1933. Air travel and tourism fell sharply, and Congress passed emergency spending and an airline aid package within weeks.
- The Fed cuts its policy rate 11 times, from 6.5% to 1.75% The first cut came in an unscheduled meeting on January 3. By December the federal funds rate was at its lowest level since 1961.
- Congress passes a $1.35 trillion tax cut The Economic Growth and Tax Relief Reconciliation Act, signed in June, cut income tax rates over ten years and sent rebate checks of up to $600 to households that summer.
Sources: U.S. Census Bureau, Current Population Survey (income); U.S. Census Bureau, New Residential Sales (home price); U.S. Energy Information Administration (gasoline); U.S. Department of Labor (minimum wage); USPS historical rates.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.