Inflation rose to 3.4% in 2005, up from 2.7% in 2004, as gasoline averaged $2.30 a gallon, compared with $1.88 the year before. Hurricane Katrina made landfall on August 29, and with Hurricane Rita weeks later it disrupted Gulf Coast refining, pushing the national average price past $3 in early September. The Federal Reserve raised its policy rate at every meeting, from 2.25% to 4.25%, to keep energy costs from feeding into other prices. The median household earned about $46,300, up 4.5% from 2004, but the median new home price rose a further 9%, to $240,900. In April, Congress passed a bankruptcy law that made it harder to clear debts. A first-class stamp stayed at 37 cents until January 2006, and the federal minimum wage stayed at $5.15.
Year in review
Inflation in 2005
The U.S. inflation rate in 2005 was 3.4% (CPI: 195.3). Convert 2005 dollars to today →
3.4% 2005 inflation rate
2.6% 2000s average
4.7% peak month (Sep)
2.5% lowest month (Jun)
What things cost in 2005
In 2005, the median household income was $46,326, and a gallon of gas cost $2.30.
| Median household income | $46,326 |
|---|---|
| Gas (per gallon) | $2.30 |
| Median home price | $240,900 |
| First-class stamp | $0.37 |
| Federal minimum wage | $5.15 |
What $100 from 2005 was worth later
$100 from 2005 had the buying power of $170 by 2026; each milestone links to that conversion.
| In 2010 | $112 |
|---|---|
| In 2020 | $133 |
| In 2026 | $170 |
Inflation in 2005, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 190.7 | 3.0% |
| February | 191.8 | 3.0% |
| March | 193.3 | 3.1% |
| April | 194.6 | 3.5% |
| May | 194.4 | 2.8% |
| June | 194.5 | 2.5% |
| July | 195.4 | 3.2% |
| August | 196.4 | 3.6% |
| September | 198.8 | 4.7% |
| October | 199.2 | 4.3% |
| November | 197.6 | 3.5% |
| December | 196.8 | 3.4% |
Economic events of 2005
Hurricane Katrina hits the Gulf Coast on August 29; prices rose 3.4% that year.
- Hurricane Katrina hits the Gulf Coast on August 29 The storm and Hurricane Rita a few weeks later shut down refineries and pipelines along the coast, and the national average gasoline price passed $3 a gallon for the first time in early September.
- The Fed raises rates at every meeting Eight quarter-point increases took the federal funds rate from 2.25% to 4.25% by December, as officials tried to keep energy costs from spreading into wages and other prices.
- Congress tightens personal bankruptcy rules The Bankruptcy Abuse Prevention and Consumer Protection Act, signed in April, made it harder to wipe out debts under Chapter 7 and sent a rush of filings ahead of its October effective date.
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.