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.
Year in review
Inflation in 2020
The U.S. inflation rate in 2020 was 1.2% (CPI: 258.811). Convert 2020 dollars to today →
1.2% 2020 inflation rate
3.8% 2020s average
2.5% peak month (Jan)
0.1% lowest month (May)
What things cost in 2020
| Median household income | $67,521 |
|---|---|
| Gas (per gallon) | $2.17 |
| Median home price | $336,900 |
| First-class stamp | $0.55 |
| Federal minimum wage | $7.25 |
What $100 from 2020 was worth later
| In 2026 | $128 |
|---|
Inflation in 2020, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 257.971 | 2.5% |
| February | 258.678 | 2.3% |
| March | 258.115 | 1.5% |
| April | 256.389 | 0.3% |
| May | 256.394 | 0.1% |
| June | 257.797 | 0.6% |
| July | 259.101 | 1.0% |
| August | 259.918 | 1.3% |
| September | 260.28 | 1.4% |
| October | 260.388 | 1.2% |
| November | 260.229 | 1.2% |
| December | 260.474 | 1.4% |
Economic events of 2020
- Consumer prices rise just 1.2% for the year as pandemic lockdowns crush demand The mildest annual inflation since 2015. Energy led the drag: gasoline, jet fuel, and hotel rates collapsed as lockdowns emptied roads and airports in the spring. Grocery prices moved the other way, with pantry stocking and meatpacking-plant disruptions pushing food-at-home costs up faster than usual.
- Oil futures go negative for the first time in history On April 20, U.S. crude for May delivery settled at about negative $37 a barrel. Storage tanks at the Cushing, Oklahoma delivery point were nearly full, and traders holding contracts they could not take physical delivery of paid buyers to take the oil off their hands. Retail gasoline fell to about $1.80 a gallon nationally that month, the cheapest since 2016.
- Congress passes the $2.2 trillion CARES Act in March Signed March 27, it was the largest emergency relief bill in U.S. history at the time: $1,200 payments to most adults, a $600-a-week boost to unemployment benefits, and the Paycheck Protection Program for small businesses, deployed within weeks as states ordered widespread business closures to slow the spread of COVID-19.
- The Fed cuts its policy rate to near zero and pledges unlimited bond buying Two emergency cuts on March 3 and March 15 brought the federal funds rate to 0-0.25%. The Fed also committed to buying Treasury and mortgage-backed securities "in the amounts needed" to keep credit markets functioning, a more open-ended pledge than the fixed-size bond purchases used during the 2008 financial crisis.
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.