Referential USD based on CPI-U (2014e)

Referential currency (list of topics) » Referential USD based on CPI-U (2014e)

Note: This article is being updated. For the officially published article, go to: PEREZGONZALEZ Jose D (2013). Referential USD based on CPI-U (2013e)⁶. Knowledge (ISSN 2324-1624), 2014, pages 20-23.] [DOI] [Printer friendly]

Referential USD

Referential US dollars (rUSD, r$) is the real value of the US dollar (USD, $) back in 2010, which is used here as referential currency for better understanding the value of money overtime. The referential dollar is based on the average value of the United States consumer price index for all urban consumers - US CPI-U Average (United States Bureau of Labor Statistics, 2014³, also Rate Inflation, 2014²). The CPI-U is a useful index for comparing the cost of consumer goods and services (Williamson, 2011⁵), and represents well the consumer patterns of about 80% of the U.S. population (excluding rural consumers, the military and institutional populations - Wikipedia, 2011⁴). It is calculated by updating the nominal value of the dollar with the appropriate multiplier. The formula for transforming USD into rUSD follows, while Table 1 provides the correct multiplier (an inflator/deflator multiplier) for the formula.

Formulas
rUSD = nominal USD * value multiplier	= value of money throughout time, with base 2010 (= 218.1/CPI)
currency equivalence = nominal USD * currency multiplier	= equivalent currency throughout time, with base 2010 (= CPI/218.1)

Table 1. CPI-U for USA and rUSD multipliers
Year	CPI A.Avg	Base 2010	value multiplier	currency multiplier
1913	9.9	218.1	22.0258	0.0454
1914	10.0	218.1	21.8055	0.0459
1915	10.1	218.1	21.5896	0.0463
1916	10.9	218.1	20.0050	0.0500
1917	12.8	218.1	17.0355	0.0587
1918	15.1	218.1	14.4407	0.0692
1919	17.3	218.1	12.6043	0.0793
1920	20.0	218.1	10.9028	0.0917
1921	17.9	218.1	12.1818	0.0821
1922	16.8	218.1	12.9795	0.0770
1923	17.1	218.1	12.7518	0.0784
1924	17.1	218.1	12.7518	0.0784
1925	17.5	218.1	12.4603	0.0803
1926	17.7	218.1	12.3195	0.0812
1927	17.4	218.1	12.5319	0.0798
1928	17.1	218.1	12.7518	0.0784
1929	17.1	218.1	12.7518	0.0784
1930	16.7	218.1	13.0572	0.0766
1931	15.2	218.1	14.3457	0.0697
1932	13.7	218.1	15.9164	0.0628
1933	13.0	218.1	16.7735	0.0596
1934	13.4	218.1	16.2728	0.0615
1935	13.7	218.1	15.9164	0.0628
1936	13.9	218.1	15.6874	0.0637
1937	14.4	218.1	15.1427	0.0660
1938	14.1	218.1	15.4649	0.0647
1939	13.9	218.1	15.6874	0.0637
1940	14.0	218.1	15.5754	0.0642
1941	14.7	218.1	14.8337	0.0674
1942	16.3	218.1	13.3776	0.0748
1943	17.3	218.1	12.6043	0.0793
1944	17.6	218.1	12.3895	0.0807
1945	18.0	218.1	12.1142	0.0825
1946	19.5	218.1	11.1823	0.0894
1947	22.3	218.1	9.7783	0.1023
1948	24.1	218.1	9.0479	0.1105
1949	23.8	218.1	9.1620	0.1091
1950	24.1	218.1	9.0479	0.1105
1951	26.0	218.1	8.3867	0.1192
1952	26.5	218.1	8.2285	0.1215
1953	26.7	218.1	8.1669	0.1224
1954	26.9	218.1	8.1061	0.1234
1955	26.8	218.1	8.1364	0.1229
1956	27.2	218.1	8.0167	0.1247
1957	28.1	218.1	7.7600	0.1289
1958	28.9	218.1	7.5452	0.1325
1959	29.1	218.1	7.4933	0.1335
1960	29.6	218.1	7.3667	0.1357
1961	29.9	218.1	7.2928	0.1371
1962	30.2	218.1	7.2204	0.1385
1963	30.6	218.1	7.1260	0.1403
1964	31.0	218.1	7.0340	0.1422
1965	31.5	218.1	6.9224	0.1445
1966	32.4	218.1	6.7301	0.1486
1967	33.4	218.1	6.5286	0.1532
1968	34.8	218.1	6.2659	0.1596
1969	36.7	218.1	5.9416	0.1683
1970	38.8	218.1	5.6200	0.1779
1971	40.5	218.1	5.3841	0.1857
1972	41.8	218.1	5.2166	0.1917
1973	44.4	218.1	4.9111	0.2036
1974	49.3	218.1	4.4230	0.2261
1975	53.8	218.1	4.0531	0.2467
1976	56.9	218.1	3.8322	0.2609
1977	60.6	218.1	3.5983	0.2779
1978	65.2	218.1	3.3444	0.2990
1979	72.6	218.1	3.0035	0.3329
1980	82.4	218.1	2.6463	0.3779
1981	90.9	218.1	2.3988	0.4169
1982	96.5	218.1	2.2596	0.4425
1983	99.6	218.1	2.1893	0.4568
1984	103.9	218.1	2.0987	0.4765
1985	107.6	218.1	2.0265	0.4935
1986	109.6	218.1	1.9896	0.5026
1987	113.6	218.1	1.9195	0.5210
1988	118.3	218.1	1.8432	0.5425
1989	124.0	218.1	1.7585	0.5687
1990	130.7	218.1	1.6684	0.5994
1991	136.2	218.1	1.6010	0.6246
1992	140.3	218.1	1.5542	0.6434
1993	144.5	218.1	1.5090	0.6627
1994	148.2	218.1	1.4714	0.6796
1995	152.4	218.1	1.4308	0.6989
1996	156.9	218.1	1.3898	0.7195
1997	160.5	218.1	1.3586	0.7361
1998	163.0	218.1	1.3378	0.7475
1999	166.6	218.1	1.3089	0.7640
2000	172.2	218.1	1.2663	0.7897
2001	177.1	218.1	1.2313	0.8122
2002	179.9	218.1	1.2121	0.8250
2003	184.0	218.1	1.1851	0.8438
2004	188.9	218.1	1.1543	0.8663
2005	195.3	218.1	1.1165	0.8956
2006	201.6	218.1	1.0816	0.9245
2007	207.3	218.1	1.0517	0.9509
2008	215.3	218.1	1.0128	0.9874
2009	214.5	218.1	1.0164	0.9839
2010	218.1	218.1	1.0000	1.0000
2011	224.9	218.1	0.9694	1.0316
2012	229.6	218.1	0.9497	1.0529
2013	233.0	218.1	0.9360	1.0683
2014	236.7	218.1	0.9211	1.0857
2015*	243.8	218.1	0.8943	1.1182
2016*	251.2	218.1	0.8682	1.1518
2017*	258.7	218.1	0.8429	1.1863
2018*	266.4	218.1	0.8184	1.2219
2019*	274.4	218.1	0.7945	1.2586
2020*	282.7	218.1	0.7714	1.2963
2021*	291.2	218.1	0.7489	1.3352
(Assuming a 3% accumulated inflation rate.)*

For example, a salary of $10,000 back in 1972 had the same purchasing power (ie, value) than a salary of $52,166 in 2010 (= $10,000 * 5.2166). And a salary of $40,000 in 2014 had the same purchasing power than salary of $36,844 in 2010. Thus, a person earning $10,000 in 1972 was actually better off than a person earning $40,000 in 2014.

On the other hand, the currency equivalence of a purchasing power of r$40,000 in 2010 was $7,668 in 1972 ( = r$40,000 * 0.1917). That is, whatever was worth $40,000 in 2010 could have been bought with $7,668 back in 1972.

[[[tab References]

References

1. PEREZGONZALEZ Jose D (2012). Referential USD based on CPI-U (2012e). Knowledge (ISSN 2324-1624), 2013, pages 81-84. doi:10.6084/m9.figshare.706985

2. RATE INFLATION (2014). American Consumer Price Index (CPI) History. Retrieved from Rate Inflation on 23 April 2015.

3. U.S. BUREAU OF LABOR STATISTICS (2014). Consumer price index. Retrieved from U.S. Department of Labor on 23 April 2015.

4. WIKIPEDIA (2011). United States consumer price index. Retrieved from Wikipedia on 21 July 2011.

5. WILLIAMSON Samuel H (2011). Seven ways to compute the relative value of a U.S. dollar amount, 1774 to present. Retrieved from MeasuringWorth on 21 July 2011.

+++ Footnotes +++

6. The 2013 edition updates the 2012 edition¹ with the official CPI-U values for that year.

Did you understand?

+ Test yourself

Outdated versions

PEREZGONZALEZ Jose D (2010). Referential USD based on CPI-U (2010e). Journal of Knowledge Advancement & Integration (ISSN 1177-4576), 2011, pages 61-64.
PEREZGONZALEZ Jose D (2011). Referential USD based on CPI-U (2011e). Journal of Knowledge Advancement & Integration (ISSN 1177-4576), 2012, pages 117-120.
PEREZGONZALEZ Jose D (2012). Referential USD based on CPI-U (2012e). Knowledge (ISSN 2324-1624), 2013, pages 81-84, doi:10.6084/m9.figshare.706985

[[[/tabview]

Author

Jose D PEREZGONZALEZ (2015). Massey University, Turitea Campus, Private Bag 11-222, Palmerston North 4442, New Zealand. (JDPerezgonzalez).

Want to know more?

Fxtop.com: A handy website for current and historical exchange rates for multiple currency denominations.
MeasuringWorth: A handy website to learn about different inflation indexes and calculate the value of money according to those indexes.
WikiofScience - Referential currency (list of topics): This page offers links to available topics related to referential currencies.