Inflation was 2.3% in 2003, up from 1.6% in 2002, as gasoline climbed from $1.36 to $1.59 a gallon around the March invasion of Iraq. Even so, the Federal Reserve spent the year worried about prices being too low: on June 25 it cut its policy rate to 1.0%, the lowest since 1958, and said the risk of deflation, though small, deserved a response. The median household earned about $43,300 and a new home cost roughly $195,000. Congress passed a second round of tax cuts in May, and the economy grew faster in the second half of the year than at any point since 1999. Hiring lagged the recovery, and unemployment peaked at 6.3% in June. A first-class stamp stayed at 37 cents and the federal minimum wage at $5.15.
Year in review
Inflation in 2003
The U.S. inflation rate in 2003 was 2.3% (CPI: 184). Convert 2003 dollars to today →
2.3% 2003 inflation rate
2.6% 2000s average
3.0% peak month (Mar)
1.8% lowest month (Nov)
What things cost in 2003
In 2003, the median household income was $43,318, and a gallon of gas cost $1.59.
| Median household income | $43,318 |
|---|---|
| Gas (per gallon) | $1.59 |
| Median home price | $195,000 |
| First-class stamp | $0.37 |
| Federal minimum wage | $5.15 |
What $100 from 2003 was worth later
$100 from 2003 had the buying power of $181 by 2026; each milestone links to that conversion.
| In 2010 | $119 |
|---|---|
| In 2020 | $141 |
| In 2026 | $181 |
Inflation in 2003, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 181.7 | 2.6% |
| February | 183.1 | 3.0% |
| March | 184.2 | 3.0% |
| April | 183.8 | 2.2% |
| May | 183.5 | 2.1% |
| June | 183.7 | 2.1% |
| July | 183.9 | 2.1% |
| August | 184.6 | 2.2% |
| September | 185.2 | 2.3% |
| October | 185 | 2.0% |
| November | 184.5 | 1.8% |
| December | 184.3 | 1.9% |
Economic events of 2003
The Fed cuts its policy rate to 1.0%, the lowest since 1958; prices rose 2.3% that year.
- The Fed cuts its policy rate to 1.0%, the lowest since 1958 The cut on June 25 followed a warning from Fed officials that inflation had become uncomfortably low, and the central bank said it saw a small but real risk of deflation. Rates stayed at 1.0% for another year.
- The United States invades Iraq in March Oil prices had risen ahead of the invasion, then dropped once fighting began, and gasoline averaged $1.59 a gallon for the year, up from $1.36 in 2002.
- Congress passes a second round of tax cuts The Jobs and Growth Tax Relief Reconciliation Act, signed in May, lowered tax rates on dividends and capital gains and accelerated cuts to income tax rates.
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.