# \$1 in 2016 is worth \$1.08 in 2020

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## Value of \$1 from 2016 to 2020

\$1 in 2016 is equivalent in purchasing power to about \$1.08 in 2020, an increase of \$0.08 over 4 years. The dollar had an average inflation rate of 1.90% per year between 2016 and 2020, producing a cumulative price increase of 7.84%.

This means that prices in 2020 are 1.08 times higher than average prices since 2016, according to the Bureau of Labor Statistics consumer price index.

The 2016 inflation rate was 1.26%. The inflation rate in 2020 was 1.23%. The 2020 inflation rate is higher compared to the average inflation rate of 0.64% per year between 2020 and 2021.

 Cumulative price change 7.84% Average inflation rate 1.90% Converted amount (\$1 base) \$1.08 Price difference (\$1 base) \$0.08 CPI in 2016 240.007 CPI in 2020 258.812 Inflation in 2016 1.26% Inflation in 2020 1.23% \$1 in 2016 \$1.08 in 2020

USD Inflation since 1913
Annual Rate, the Bureau of Labor Statistics CPI

## Buying power of \$1 in 2016

This chart shows a calculation of buying power equivalence for \$1 in 2016 (price index tracking began in 1635).

For example, if you started with \$1, you would need to end with \$1.08 in order to "adjust" for inflation (sometimes refered to as "beating inflation").

When \$1 is equivalent to \$1.08 over time, that means that the "real value" of a single U.S. dollar decreases over time. In other words, a dollar will pay for fewer items at the store.

This effect explains how inflation erodes the value of a dollar over time. By calculating the value in 2016 dollars, the chart below shows how \$1 is worth less over 4 years.

According to the Bureau of Labor Statistics, each of these USD amounts below is equal in terms of what it could buy at the time:

Dollar inflation: 2016-2020
Year Dollar Value Inflation Rate
2016 \$1.00 1.26%
2017 \$1.02 2.13%
2018 \$1.05 2.49%
2019 \$1.07 1.76%
2020 \$1.08 1.23%
2021 \$1.09 0.64%*
* Compared to previous annual rate. Not final. See inflation summary for latest 12-month trailing value.

This conversion table shows various other 2016 amounts in 2020 dollars, based on the 7.84% change in prices:

Conversion: 2016 dollars in 2020
Initial value Equivalent value
\$1 dollar in 2016 \$1.08 dollars in 2020
\$5 dollars in 2016 \$5.39 dollars in 2020
\$10 dollars in 2016 \$10.78 dollars in 2020
\$50 dollars in 2016 \$53.92 dollars in 2020
\$100 dollars in 2016 \$107.84 dollars in 2020
\$500 dollars in 2016 \$539.18 dollars in 2020
\$1,000 dollars in 2016 \$1,078.35 dollars in 2020
\$5,000 dollars in 2016 \$5,391.75 dollars in 2020
\$10,000 dollars in 2016 \$10,783.50 dollars in 2020
\$50,000 dollars in 2016 \$53,917.52 dollars in 2020
\$100,000 dollars in 2016 \$107,835.05 dollars in 2020
\$500,000 dollars in 2016 \$539,175.25 dollars in 2020
\$1,000,000 dollars in 2016 \$1,078,350.49 dollars in 2020

## Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 2016 to 2020 (figures shown are purchasing power equivalents of \$1):

San Diego, California experienced the highest rate of inflation during the 4 years between 2016 and 2020 (4.32%).

St Louis, Missouri experienced the lowest rate of inflation during the 4 years between 2016 and 2020 (1.22%).

Note that some locations showing 0% inflation may have not yet reported latest data.

## Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £1.00 in 2016 would be equivalent to £1.10 in 2020, an absolute change of £0.10 and a cumulative change of 9.69%.

In Canada, CA\$1.00 in 2016 would be equivalent to CA\$1.06 in 2020, an absolute change of CA\$0.06 and a cumulative change of 6.23%.

Compare these numbers to the US's overall absolute change of \$0.08 and total percent change of 7.84%.

## Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. Breaking down these categories helps explain the main drivers behind price changes. This chart shows the average rate of inflation for select CPI categories between 2016 and 2020.

Compare these values to the overall average of 1.90% per year:

Category Avg Inflation (%) Total Inflation (%) \$1 in 2016 → 2020
Food and beverages 1.86 7.66 1.08
Housing 2.73 11.39 1.11
Apparel -1.62 -6.32 0.94
Transportation 0.82 3.30 1.03
Medical care 2.85 11.91 1.12
Recreation 1.11 4.49 1.04
Education and communication 0.21 0.84 1.01
Other goods and services 2.25 9.30 1.09

The graph below compares inflation in categories of goods over time. Click on a category such as "Food" to toggle it on or off:

For all these visualizations, it's important to note that not all categories may have been tracked since 2016. This table and charts use the earliest available data for each category.

## How to Calculate Inflation Rate for \$1, 2016 to 2020

Our calculations use the following inflation rate formula to calculate the change in value between 2016 and 2020:

CPI in 2020 CPI in 2016
×
2016 USD value
=
2020 USD value

Then plug in historical CPI values. The U.S. CPI was 240.007 in the year 2016 and 258.81166666667 in 2020:

258.81166666667240.007
×
\$1
=
\$1.08

\$1 in 2016 has the same "purchasing power" or "buying power" as \$1.08 in 2020.

To get the total inflation rate for the 4 years between 2016 and 2020, we use the following formula:

CPI in 2020 - CPI in 2016CPI in 2016
×
100
=
Cumulative inflation rate (4 years)

Plugging in the values to this equation, we get:

258.81166666667 - 240.007240.007
×
100
=
8%

## Alternate Measurements of Inflation

The above data describe the CPI for all items. Also of note is the Core CPI, which measures inflation for all items except for the more volatile categories of food and energy. Core inflation averaged 1.97% per year between 2016 and 2020 (vs all-CPI inflation of 1.90%), for an inflation total of 8.11%.

When using the core inflation measurement, \$1 in 2016 is equivalent in buying power to \$1.08 in 2020, a difference of \$0.08. Recall that for All Items, the converted amount is \$1.08 with a difference of \$0.08.

In 2016, core inflation was 2.21%.

Chained CPI is an alternative measurement that takes into account how consumers adjust spending for similar items. Chained inflation averaged 1.51% per year between 2016 and 2020, a total inflation amount of 8.11%.

According to the Chained CPI measurement, \$1 in 2016 is equal in buying power to \$1.06 in 2020, a difference of \$0.06 (versus a converted amount of \$1.08/change of \$0.08 for All Items).

In 2016, chained inflation was 0.93%.

## Comparison to S&P 500 Index

The average inflation rate of 1.90% has a compounding effect between 2016 and 2020. As noted above, this yearly inflation rate compounds to produce an overall price difference of 7.84% over 4 years.

To help put this inflation into perspective, if we had invested \$1 in the S&P 500 index in 2016, our investment would be nominally worth approximately \$2.10 in 2020. This is a return on investment of 109.65%, with an absolute return of \$1.10 on top of the original \$1.

These numbers are not inflation adjusted, so they are considered nominal. In order to evaluate the real return on our investment, we must calculate the return with inflation taken into account.

The compounding effect of inflation would account for 7.27% of returns (\$0.15) during this period. This means the inflation-adjusted real return of our \$1 investment is \$0.94. You may also want to account for capital gains tax, which would take your real return down to around \$1 for most people.

Investment in S&P 500 Index, 2016-2020
Original Amount Final Amount Change
Nominal \$1 \$2.10 109.65%
Real
\$1 \$1.94 94.42%

Information displayed above may differ slightly from other S&P 500 calculators. Minor discrepancies can occur because we use the latest CPI data for inflation, annualized inflation numbers for previous years, and we compute S&P price and dividends from January of 2016 to latest available data for 2020 using average monthly close price.

For more details on the S&P 500 between 2016 and 2020, see the stock market returns calculator.

## News headlines from 2016

Politics and news often influence economic performance. Here's what was happening at the time:

• The United Kingdom votes to leave the European Union in a referendum, prompting Prime Minister David Cameron to resign.
• Donald Trump becomes the 45th President of the United States.
• The World Health Organisation confirms the outbreak of the Zika virus.
• Andrei Karlov, the Russian ambassador to Turkey, is assassinated.

## Data Source & Citation

Raw data for these calculations comes from the Bureau of Labor Statistics' (CPI), established in 1913. Inflation data from 1665 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University.

You may use the following MLA citation for this page: “\$1 in 2016 → 2020 | Inflation Calculator.” Official Inflation Data, Alioth Finance, 17 Jan. 2021, https://www.officialdata.org/2016-dollars-in-2020?amount=1.

Special thanks to QuickChart for their chart image API, which is used for chart downloads.

#### About the author

Ian Webster is an engineer and data expert based in San Mateo, California. He has worked for Google, NASA, and consulted for governments around the world on data pipelines and data analysis. Disappointed by the lack of clear resources on the impacts of inflation on economic indicators, Ian believes this website serves as a valuable public tool. Ian earned his degree in Computer Science from Dartmouth College.

 Cumulative price change 7.84% Average inflation rate 1.90% Converted amount (\$1 base) \$1.08 Price difference (\$1 base) \$0.08 CPI in 2016 240.007 CPI in 2020 258.812 Inflation in 2016 1.26% Inflation in 2020 1.23% \$1 in 2016 \$1.08 in 2020