Understanding the Trend
The chart above demonstrates the relentless nature of inflation. While short-term fluctuations occur, the long-term trend is undeniable: standard currency devalues over time.
The Blue Line (CPI) represents the cost of a standard basket of goods. As it climbs, it costs more dollars to buy the same things. The Red Line (Purchasing Power) shows the real value of a 2000 dollar bill. Today, that bill buys less than 55% of what it could two decades ago.
Methodology
Data is sourced from the US Bureau of Labor Statistics (BLS) Consumer Price Index for All Urban Consumers (CPI-U). We normalized the data setting the year 2000 as the baseline (Purchasing Power = 100).
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