US Inflation from 1920 to 1925
US inflation from 1920 to 1925 was -12.5%. $100 in 1920 had the same purchasing power as $87.50 in 1925 (avg. -2.64%/yr).
$100.00 in 1920 is worth
$87.50
in 1925
-12.5%
-2.64%/yr
How prices changed from 1920 to 1925
| Item | 1920 | 1925 | Change |
|---|---|---|---|
| Gallon of gas | $0.30 | $0.22 | −27% |
| Loaf of bread | $0.12 | $0.09 | −25% |
What Drove Inflation from 1920 to 1925
The 1920s brought dramatic swings from postwar deflation to the prosperity of the Roaring Twenties. After a sharp recession in 1920–21, the economy boomed as mass production, consumer credit, and new technologies like automobiles and radios reshaped daily life. Prices were broadly stable through the decade, disguising underlying financial imbalances that would eventually unravel.
After the 1920–21 deflation shock, the US economy roared back. Mass production techniques, especially in the auto industry, drove productivity gains and kept goods prices surprisingly stable even as wages rose. Consumer credit expanded rapidly, fueling purchases of cars, appliances, and homes. Financial speculation ran rampant, and the stock market tripled before the crash of October 1929 exposed the era's fragile foundations.
Understanding the Numbers
Over these 5 years, prices rose modestly — a total inflation rate of -12.5%. The annualized rate of -2.64% per year was well below the historical average of roughly 3.3% per year.
Compare Other Periods
Starting from 1920:
Ending in 1925: