What is the Current U.S. Inflation Rate?

Current Annual inflation for the 12 months ending April 2023 is 4.93%

Jump to Current Inflation Table | Jump to Current Inflation Chart

Inflation is down from the June peak of 9.06%, but even moderate inflation can rapidly erode purchasing power and creates uncertainty as businesses have more difficulty estimating future costs.

Based on the Rule of 72 if inflation is 7.2% it will take roughly 10 years for prices to double. With 4.93%% inflation, prices will double in roughly 14.4 years (72 ÷ 4.93% = 14.6 years).

Imagine what it would be like to pay twice as much for everything 14 years from now! Will your salary double as well?If not your purchasing power will fall.

Usually, high inflation rates also correspond to high interest rates as lenders need to compensate for the decline in purchasing power of future interest and principal repayments. This results in higher costs of doing business and place an overall drag on the economy. Currently, you are lucky if you can get 5%interest on your savings which will barely let you break even. In a healthy economy interest rates exceed the inflation rate.

The inflation rate plays an important role in determining the health of an economy. Countries with extremely high inflation rates are said to have hyperinflation and when this occurs the economy is often near collapse. See: Hyperinflation in Turkey and Argentina Today

U.S. Annual Inflation Rate in Percent

We calculate the Current Inflation rate (see table below) to two decimal places while the Bureau of Labor Statistics only calculates inflation to one decimal place. Therefore, while being based on the same government Consumer Price index (CPI-U) our data provides a "finer" view.

Current Inflation Rate March and April 2023 is a perfect example, according to the government statistics March=5.0%, and April=4.9%. However, our data shows inflation in March as 4.98%, and April as 4.93%. Therefore we can see that there is actually very little difference between the two months.

In another example we see, according to the government statistics March 2022 =8.5%, May 2022 =8.6%, and July 2022 =8.5%. However, our data shows inflation in March as 8.54%, May as 8.58%, July as 8.52%. Therefore we can see how little change actually occured over this 3 month period.

For a more in depth commentary see Annual Inflation Rate Commentary

Current Annual Inflation Chart

Current Inflation Rate Chart

The BLS Commissioner reported:

"The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in April on a seasonally adjusted basis after increasing 0.1 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 4.9 percent before seasonal adjustment.

The index for shelter was the largest contributor to the monthly all items increase, followed by increases in the index for used cars and trucks and the index for gasoline. The increase in the gasoline index more than offset declines in other energy component indexes, and the energy index rose 0.6 percent in April. The food index was unchanged in April, as it was in March. The index for food at home fell 0.2 percent over the month while the index for food away from home rose 0.4 percent."

On an annual (non-adjusted) basis inflation fell from 4.98% to 4.93%.

The reason the Commissioner blames the rise on shelter costs, is because they make up a fairly significant portion of the total CPI making up 34.413% of the total index. Of that roughly 4% is due to household energy usage so had fuel oil and Natural Gas (piped) prices not declined shelter costs would be even higher.
To see the entire percentage breakdown of the CPI go here.

Seasonally Adjusted Inflation Components Table

The Inflation table below is updated monthly and provides the current Annual US Inflation Rate (not seasonally adjusted) in the right-hand column and the other columns show various monthly components on a Seasonally Adjusted basis. The Inflation rate is calculated using the Current Consumer Price Index (CPI-U) published monthly by the Bureau of Labor Statistics. CPI Index Release Dates

On an annual basis, shelter is up 8.1%. Food is up 7.7% (food makes up a little over 13.5% of the CPI total).
But on a monthly basis, Used cars were up 4.4%, Energy Commodities were up 2.7% and Gasoline was up3.0%. But Fuel oil was down -4.5%, and Utility Piped Gas was down -4.9%. And several other categories were down slightly as well.

Table A

Current Inflation Table

You may also be interested in a table of Monthly Inflation Rate data, which shows how much prices have increased over the previous month. Also check our current articles.

Since high inflation is detrimental to the overall economy but beneficial to the government (since it allows them to pay back their debt with "cheaper dollars") the Federal Reserve has a constant balancing act to try to reconcile the government's desires for higher inflation with the need for a healthy economy.

In an effort to convince people that inflation is really good, the government has a constant media circus going promoting the benefits of inflation and decrying the evils of deflation--- but what's so bad about falling prices?

Their major argument revolves around the "stimulating" effects of inflation. Basically it makes people feel richer until they eventually realize that each of their dollars now buys less. But in the meantime they tend to spend the "excess". This results in people buying things they wouldn't have, had they realized that their money was actually worth less than they thought. Eventually this results in a monetary "hangover" as the effects of their buying binge become apparent.

Inflation is largely a result of increases in the money supply months or even years previously. Because of this serious lag in the time between the money creation and the time it shows up in the economy the FED must estimate the impact their money creation efforts will have years in advance. The Federal Reserve tries to target a 2% inflation rate but often over or underestimates the effect their actions will have.

The Federal Reserve monitors the inflation rate for its targeting purposes using the "Core Inflation Rate" which excludes food and energy leading some people to mistakenly believe that the U.S. government doesn't track those items in the inflation rate. Actually the Bureau of labor statistics does track them but the FED simply excludes them for targeting purposes because they are volatile and subject to external forces unrelated to the money supply.

We believe a picture is worth a thousand words, so we track the recent inflation rate in chart form to give you a better sense of the current direction of inflation and also the longer term inflation trends.

The inflation rate is calculated using the Consumer Price Index or CPI.
To calculate inflation from a month and year to a later month and year, Try our Inflation calculator.

We also post the previous Inflation Rates in our Historical Inflation Tables. The Historical Consumer Price Index is also available in table format. You can instantly see the current inflation trend in our chart of the Annual Inflation Rate.

Subscribe to our FREE monthly E-zine and we will keep you up-to-date on what is happening in the area of inflation, interest rates and market trends.

You may also enjoy: