CPI Inflation Rate Calculator
Turn two Consumer Price Index readings into the inflation rate between them — and see how much buying power shifted.
Buying power fell about -3.85%: the same money buys 3.85% less.
The inflation rate is (CPI₂ − CPI₁) ÷ CPI₁ × 100. With an earlier CPI of 250 and a later CPI of 260, that is (260 − 250) ÷ 250 × 100 = 4.0%. A positive result means prices rose (inflation); a negative result, such as 260 → 255 giving −1.92%, means prices fell (deflation).
What this measures
The Consumer Price Index (CPI) tracks the average price of a fixed basket of goods and services relative to a base period. On its own a CPI number — say 260 — carries no meaning; it only matters compared with another reading. The inflation rate is the percent change between two CPI values: how much more (or less) the same basket costs over the period. This calculator takes an earlier and a later CPI and returns that rate, plus the matching change in buying power.
CPI₁ is the earlier index and CPI₂ the later one; a negative result is deflation. Buying-power change = CPI₁ ÷ CPI₂ − 1.
Worked example
Suppose the CPI rose from 250 to 260 over one year.
- 1 Identify the two index values. Earlier CPI₁ = 250, later CPI₂ = 260. Make sure both use the same base year.
- 2 Subtract to find the change. CPI₂ − CPI₁ = 260 − 250 = 10 index points.
- 3 Divide by the earlier value. 10 ÷ 250 = 0.04 — the change as a fraction of the starting level.
- 4 Multiply by 100 for the percent. 0.04 × 100 = 4.0% — the inflation rate for the period.
- 5 Check buying power. 250 ÷ 260 − 1 ≈ −3.85%: the same money now buys about 3.85% less.
CPI pairs and their inflation rate
Each row applies (CPI₂ − CPI₁) ÷ CPI₁ × 100. The last row is negative — a period of deflation.
| Earlier CPI₁ | Later CPI₂ | Change | Inflation rate |
|---|---|---|---|
| 100 | 102 | +2 | +2.00% |
| 250 | 260 | +10 | +4.00% |
| 200 | 230 | +30 | +15.00% |
| 260 | 255 | −5 | −1.92% |
Reading the result
Positive is inflation, negative is deflation. A rate above zero means the basket got more expensive; a rate below zero means prices actually fell — deflation, which is rarer and can signal weak demand. A rate near zero is price stability.
The base year cancels out. Because CPI is an index tied to a base period (often set to 100), the absolute values don’t matter — only their ratio. Rebasing the series to a different base year leaves the inflation rate between any two dates unchanged.
Not the same as the GDP deflator. The CPI measures a fixed consumer basket, so it captures what households pay. The GDP deflator covers every good and service produced domestically and reweights as output changes. The two usually move together but can diverge, so use CPI for cost-of-living questions.