By JLP | September 21, 2009
Here is something for all you chart and graphics lovers.
I took the information available from this BLS.gov’s CPI page and made a couple of graphics.
This first one shows the percent change in the yearly CPI beginning in 1920:
What’s really interesting is this line graph, which tracks the CPI in dollar terms (assuming $1.00 at the beginning of 1920):
Notice how the CPI really turns up around the mid-70s. That’s the bad thing about compounding. Just as interest on a bank account compounds (growth on top of growth), so does inflation. Couple that with the high inflation rates of the 70s and you can see why the chart took such a drastic turn upward beginning in the 70s. Prior to the 70s, inflation was relatively flat.