USD Purchasing Power in Real Time Since 2000

26•traviswingo•2h ago

Comments

spprashant•49m ago

You know what, it's not as bad as I was thinking.

kvuj•46m ago

For me it's the opposite. I am a bit surprised that inflation halved buying power since 2000.

In my mind those level of interest usually come from the stock market or house appreciation, but I guess those are much faster (I seem to recall doubling every 8 years in the stock market and housing being a bit slower).

xarchive•43m ago

It would be useful if you explain how you calculate it. I mean, if you just apply a decaying exponential function, anyone can do that on their calculator.

irishcoffee•35m ago

I think the more interesting thing to chew on is how this will look over the next 25 years. The numbers will be... huge. 75k salary in 2000 is similar to 150k salary in 2026, project that out to 2050...

Something feels like it'll give out, but I've felt that way for 8 years at this point and I haven't been correct.

DCA and pray I suppose.

edit: a word

jdlshore•32m ago

Rule of 72. For costs to double in 26 years, that means inflation was about 2.7-2.8%, which is pretty much where it’s supposed to be.

Dylan16807•28m ago

> I am a bit surprised that inflation halved buying power since 2000.

It's a bit more than I expected but a 2% drop 26 times gets pretty close to halving.

The number on the page suggests 2.5% average inflation.

drbig•37m ago

As much as the notion of "Purchasing Power" is <macro>economic, thus perhaps having a greater chance of being related to reality, I've been wondering if - and how - could these long-term measures account for greater diversity and "scale" of "things money can buy".

Nowadays if you're properly rich you can buy a seat on a sub-orbital flight. This wasn't an option in '00, no matter how rich you were.

On the other end of the scale, for basic things a (really) good quality loaf of bread will always be cheaper in Poland than say up north from Oslo, Norway; whereas a USA-designed made-in-China laptop pretty much never did scale with the rest of the "CPI basket"...

Point being: we sure do have numbers - what they really mean in practice is vague at best.

vessenes•35m ago

The best example I heard recently was anesthesia. Costs less than $5 to make. Worth a lot more if you have surgery coming up.

blindriver•36m ago

What is the calculation? And how can you calculate it 10 decimal points?

spprashant•28m ago

There's a little explained if you hit the (?) at the bottom. They are taking the monthly inflation value and calculate it per tick.

nrclark•33m ago

This isn't very surprising. Typical US economic policy aims for 2-3% annual inflation. That counter shows an average 2.6% inflation across 26 years, which is kind of right in the range we'd expect.

It's debatable whether this is good longterm policy - but it's been the norm in the US for decades.

JumpCrisscross•13m ago

> Typical US economic policy aims for 2-3% annual inflation. That counter shows an average 2.6% inflation across 26 years, which is kind of right in the range we'd expect

We aim for "inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures" [1].

[1] https://www.federalreserve.gov/faqs/economy_14400.htm

downboots•7m ago

It also says nothing of where that dollar has been in 20 years

Aurornis•25m ago

$1 put into the S&P 500 with dividends reinvested would be more than $6 today. That more than offsets the inflation. It also gives some clues about why the raw dollar purchasing power has been lost to inflation.

Don’t keep your retirement savings all in cash.

slg•7m ago

It's a problem that our society is designed for and judged in relation to capital. Most people are paid in dollars, not shares of the S&P 500. 38% of the population doesn't even own any stocks[1]. We can't act like the dropping dollar value is fine simply because stock investments are outpacing those losses. Maybe that tradeoff benefits the people reading this, but it hurts a huge number of Americans.

[1] - https://news.gallup.com/poll/266807/percentage-americans-own...

JumpCrisscross•6m ago

> Most people are paid in dollars

Real wages are up since 2000 [1]. (Even the federal minimum wage went up 40% in nominal terms [2], though that is less than inflation.)

[1] https://fred.stlouisfed.org/series/LES1252881600Q

[2] https://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007

Avicebron•3m ago

Measurements like this obfuscate other costs that aren't well tracked. Healthcare and housing being two big ones.

JumpCrisscross•7m ago

> $1 put into the S&P 500 with dividends reinvested would be more than $6 today

On April 7 2000 a 30-year Treasury 5.71%. It would be worth $1,063 today and have paid out $1,484.60 in coupons to date. Even if you held those coupons in cash, you'd still have 2.5x'd your money.

Modern currencies split their medium-of-currency and store-of-value functions. The plain dollar is for transacting. Cash and cash equivalents are for transporting value across time.

traviswingo•15m ago

Hey all. This was merely intended as a fun visualization of inflation over long periods of time, in a format that’s slightly easier to grok for most people.

That’s it. There’s no further intention behind this, I just thought a real time “decay” visualization would be neat.

Literally everything about how this works is in the source in maybe 30 lines of js. It’s not complicated. Data is from BLS. I auto update the data monthly via chron.

I’m not really changing this from where it’s at. It’s done as is. There are other sources out there already if you want to customize the date range or see a graph.

Thanks for checking it out :).

0xbadcafebee•14m ago

The real time number isn't as interesting as the potential future number. If the dollar stops being the reserve currency, the purchasing power of the dollar will crash. No more cheap borrowing, no more low interest rates, hello constant high inflation. The Iran war has made that increasingly likely to happen. It may even have been intentional.

https://www.jpmorgan.com/insights/global-research/currencies... | https://spectator.com/article/the-us-currency-is-under-attac...

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