Annual U.S. inflation, 2002–2022, with 2012 highlighted. Bars below the line
are deflation. Source: BLS CPI-U.
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.
What things cost in 2012
In 2012, the median household income was $51,017, and a gallon of gas cost $3.62.
Median household income
$51,017
Gas (per gallon)
$3.62
Median home price
$245,200
First-class stamp
$0.45
Federal minimum wage
$7.25
What $100 from 2012 was worth later
$100 from 2012 had the buying power of $145
by 2026; each milestone links to that conversion.
Consumer prices rise 2.1% as energy costs plateau.
Consumer prices rise 2.1% as energy costs plateau Inflation cooled from 2011's 3.2%. Gasoline reached another annual high, but food and core prices grew more slowly, and the index rose at close to the Federal Reserve's new target pace.
The Fed adopts an explicit 2% inflation target in January For the first time, the Federal Open Market Committee stated a numerical goal, 2% annual inflation as measured by the personal consumption expenditures price index. Before this, the Fed had described its aim only as "price stability."
The Fed launches a third round of bond buying in September QE3 committed the Fed to buying $40 billion of mortgage-backed securities a month with no fixed end date, tying the policy to improvement in the labor market.
Drought hits the Midwest The USDA called it the worst drought in decades. Corn and soybean yields fell, and grain prices reached record highs that summer, feeding into livestock and food costs the following year.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index (CPI-U, U.S. city average); 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; Board of Governors of the Federal Reserve System, press releases; U.S. Department of Agriculture.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages.
See the methodology.