What is the average inflation rate each year?

The average annual U.S. inflation rate is 1.23%. However, this number can fluctuate greatly depending on national and global events. For instance, the COVID-19 pandemic and the Ukraine crisis have both had profound impacts on U.S. inflation.

Overall, since 2016, the average annual inflation rate has increased by 1.25% to 2.45% each year. The year that saw the highest year-over-year increase was actually 2018 when the inflation rate increased by 2.44%. Meanwhile, 2020 saw the lowest increase in recent years, at only 1.25%.