Deflation: Every US Year Prices Fell Since 1913
Deflation is a sustained fall in the general price level, so the same dollars buy more goods over time. In the US consumer price index it has been rare since the 1940s: the yearly average fell in 13 calendar years from 1914 to 2024, and 10 of those were before 1947.
Deflation means the prices of goods and services in general are going down, not just the price of one thing. In the United States it is measured with the consumer price index, the same index used for inflation, and the Bureau of Labor Statistics’ monthly series for it goes back to January 1913.
This page reads that record directly: how often prices have actually fallen, how deep the falls went, and why a falling inflation rate is a different thing.
How it works
The measure. The consumer price index for all urban consumers (CPI-U) prices a fixed basket of goods and services each month. When the index is lower than it was a year earlier, prices on average have fallen, and that is deflation. When the index is higher, that is inflation. The consumer price index page covers how the basket is built.
The rule used on this page. A deflation year is a calendar year whose average index, the mean of its 12 monthly values, is below the previous year’s average. The monthly test is simpler: the index compared with the same month a year earlier. Both are computed here from the BLS index, not seasonally adjusted, for 1913 to 2024.
Why it happens. Prices fall across the board when spending drops faster than the supply of goods, as in a deep recession, or when the amount of money and credit in the economy shrinks. Cheaper production can also push prices down. In the US record the link to downturns is plain: 9 of the 13 falling years had at least one recession month, against 38 of all 111 years.
Why it matters for anyone with debt. A loan is fixed in dollars. When prices fall, each of those dollars buys more, so the real weight of the debt goes up even though the balance does not change. Incomes can fall along with prices while the payments stay where they were.
A worked example
The 1929 to 1933 fall, using the BLS index. The index stood at 17.3 from Jul to Nov 1929 and reached a low of 12.6 from Mar to May 1933.
- Price change: 12.6 / 17.3 - 1 = -27.17%. Goods that cost $100.00 at the 1929 price level cost $72.83 in Mar 1933.
- Real weight of a fixed debt: 17.3 / 12.6 = 1.3730. A $100 debt taken on in Nov 1929 and repaid unchanged in Mar 1933 took 37.30% more goods to repay.
- How long it lasted: the index first got back to 17.3 or higher in Apr 1943, at 17.4, more than 13 years after the 1929 high.
The same arithmetic for 1920 to 1922. The index fell from 20.9 in Jun 1920 to 16.6 in Aug and Sep 1922, a fall of 20.57%.
The original data
111 calendar years, 1914 to 2024, from the BLS consumer price index. The yearly average fell in 13 of them:
| year | change in the yearly average |
|---|---|
| 1921 | -10.94% |
| 1922 | -6.16% |
| 1927 | -1.93% |
| 1928 | -1.15% |
| 1930 | -2.67% |
| 1931 | -8.93% |
| 1932 | -10.30% |
| 1933 | -5.19% |
| 1938 | -2.03% |
| 1939 | -1.30% |
| 1949 | -0.97% |
| 1955 | -0.28% |
| 2009 | -0.36% |
Ten of the 13 came in the 33 years from 1914 to 1946; three came in the 78 years from 1947 to 2024. The deepest was 1921, and the longest run was four years, 1930 to 1933. Counted by month, the index was below its level a year earlier in 64 months of the 1920s and 64 months of the 1930s, 128 of those 240 months.
Since 1948, falls have been short and shallow. On the seasonally adjusted index, 40 of the 943 months from Jan 1948 to Aug 2026 that can be measured had prices below a year earlier: May 1949 to Jun 1950, Sep 1954 to Aug 1955, Dec 2008 to Oct 2009 (except Feb 2009), and Jan to Apr 2015. The deepest of the 2009 readings was -1.96%, in Jul 2009. Every measurable month after Apr 2015 has shown prices above a year earlier; Oct 2025 has no index value, so it is skipped.
The yearly figures are in the CPI yearly-change file, and the monthly 12-month changes since 1948 are in the monthly CPI file.
Deflation, disinflation and the 2% target
Disinflation is a slowdown in the rate of price rises, with prices still going up. In Jun 2022 the consumer price index was 8.98% above a year earlier. By Jun 2023 that rate had dropped to 3.07%, yet the index itself rose from 294.957 to 304.014 over those 12 months, a rise of 3.07%. Prices were not falling at any point.
The lowest reading after the 2022 peak was 2.33%, in Apr 2025, and Aug 2026 was 3.35%. None of those months came close to zero.
The Federal Reserve’s goal is above zero. The Fed’s own statement sets an objective of inflation at 2 percent over the longer run, not stable or falling prices. The slowdown from 8.98% to 3.07% was a move toward that goal, not toward deflation. The tools central banks use to get there run mainly through interest rates.
When it fails
The yearly rule can miss short falls. In 2015 the monthly index was below a year earlier for four months on the seasonally adjusted series, but the yearly average still rose 0.12%, so 2015 is not on the list. Near zero the count also depends on the version: the seasonally adjusted index gives 1949, 1955 and 2009 as falling years too, by 0.98%, 0.26% and 0.32%.
One index is not every price. The CPI-U covers urban consumers’ spending. Asset prices, such as houses and shares, can fall while consumer prices rise, and that is not deflation in this sense. Falling prices in one category, such as televisions, are not deflation either.
The early data are coarse. Index values in these years are published to one decimal place, so a single step of 0.1 at an index of 12.6 is a change of 0.79%. The direction of the big falls of 1921 and 1930 to 1933 is clear; the small years, such as 1928 at -1.15%, are much closer to that rounding step.
It says nothing about what comes next. Four of the 13 falling years, 1922, 1928, 1939 and 1955, had no recession month at all, and most recession years had rising prices. The record shows when prices fell, not when they will.
Related
Inflation is the same measurement pointing the other way, and the consumer price index page explains the index behind both. Stagflation covers high inflation during slow growth, and a recession is the setting in which most of the falls on this page happened.
Check whether a chart shows prices falling or inflation falling before reading anything into it. A line of the inflation rate heading toward zero is disinflation, and the price level under it is still going up.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.