Statistics · 2026 · Stocks
Inflation and Stocks Statistics (2026)
U.S. stocks returned 9.4% a year before inflation and 7.1% after it from January 1871 to June 2026, with dividends reinvested. Consumer prices rose 2.1% a year over the same span. In the 27 calendar years with inflation above 6%, the average real return was −3.9%. The BLS reported 3.4% inflation for August 2026.
Key takeaways
- Stocks compounded at 9.4% a year nominal and 7.1% real from January 1871 to June 2026.
- The average real return was −3.9% in the 27 years with inflation above 6%, against 11.0% in years with 0% to 3%.
- The worst real decade was the 2000s at −3.2% a year.
- Cash lost 87.8% of its buying power from August 1971 to August 2026.
- 88.9% of 1,746 overlapping 10-year windows had a positive real return.
- The BLS reported 3.4% headline and 2.4% core inflation for August 2026.
What is the inflation rate now?
The consumer price index rose 3.4% over the 12 months ending August 2026, and the index without food and energy rose 2.4%, according to the Bureau of Labor Statistics. The Federal Reserve targets 2% inflation over the longer run, so headline inflation ran 1.4 percentage points above that goal.
1. Headline CPI 3.4% and core CPI 2.4%, 12 months to August 2026
The BLS release of September 11, 2026 says: “The all items index rose 3.4 percent for the 12 months ending August as it did for the 12 months ending July. The all items less food and energy index rose 2.4 percent over the year, following a 2.5-percent increase over the 12 months ending July.” (BLS CPI news release).
2. Seasonally adjusted CPI-U rose 3.35% from August 2025 to August 2026
WealthyBud’s calculation from the FRED CPIAUCSL index (CPI-U, seasonally adjusted, 1982–84 = 100): 334.131 divided by 323.291. The BLS headline uses the not-seasonally-adjusted index, so the two differ by decimals (WealthyBud data · 955 months · August 2026).
3. The Federal Reserve defines its goal as 2% inflation over the longer run
The Fed says: “the Federal Open Market Committee (FOMC) judges that inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures, is most consistent with the Federal Reserve's mandate for maximum employment and price stability.” (Federal Reserve FAQ). That index differs from CPI.
How much do stocks return after inflation?
U.S. stocks returned 9.4% a year before inflation and 7.1% after it from January 1871 to June 2026. These are compound annual rates with dividends reinvested, on S&P Composite monthly averages. Since January 1950 the rates are 11.7% nominal and 7.8% real.
4. 9.4% nominal and 7.1% real since January 1871
One dollar grew 1,144,582-fold nominal and 42,705-fold in constant dollars over 155.4 years, while consumer prices rose 2.1% a year. The data are Shiller’s (Yale) as republished monthly by multpl.com (WealthyBud data · 1,866 months · June 2026).
5. 11.7% nominal and 7.8% real since January 1950
Consumer prices rose 3.5% a year over that window, against 2.1% since January 1871 (multpl CPI, not seasonally adjusted) (WealthyBud data · 1,866 months · June 2026).
6. Stocks rose in 113 of 154 calendar years nominal and 107 of 154 real
Each year runs from the December monthly average to the next December average, 1872–2025. Because these are monthly-average series, a year’s return can differ from a December-close figure (WealthyBud data · 154 calendar years · 1872–2025).
For decade and rolling-window detail, see our stock market returns report.
How do stocks perform when inflation is high?
In the 27 calendar years with inflation above 6%, stocks averaged 6.3% nominal and −3.9% after inflation. Years with inflation from 0% to 3% averaged 12.9% nominal and 11.0% real. This describes what happened, not why; the sample is small and clustered in a few episodes.
7. Years with inflation above 6% averaged −3.9% real, with 16 of 27 years below zero
The bucket rule uses December-to-December change in the multpl CPI (not seasonally adjusted): below 0%, 0% to 3%, over 3% to 6%, above 6%. The window is 1872–2025 (154 years). The median real return in the above-6% bucket was −3.2%, and the standard error of its mean was 3.2 percentage points (WealthyBud data · 154 calendar years · 1872–2025).
8. Year counts: 33 below 0%, 65 from 0% to 3%, 29 over 3% to 6%, 27 above 6%
Counts sum to 154. 5 years show exactly 0.0% change in the underlying index and sit in the 0% to 3% bucket; 1951, at exactly 6.0%, sits in the 3–6% bucket. Returns and CPI both come from monthly-average series (WealthyBud data · 154 calendar years · 1872–2025).
9. The real-return gap between above-6% years and every lower bucket is 3.3 or more standard errors
Method: the gap in mean returns divided by the standard error of that gap (square root of the two squared standard errors). A ratio under 2 means the gap could easily be sampling noise. The ratios are 3.3 against below 0%, 3.9 against 0–3%, 4.1 against 3–6%: all above the threshold of 2 (WealthyBud data · 154 calendar years · 1872–2025).
10. Nominal means ranged from 5.8% to 16.6%, a gap of 2.6 standard errors
The gap is between the 3–6% and below 0% buckets, whose means carry standard errors of 2.4 and 3.5 percentage points. That clears the 2-standard-error threshold, but it is the largest of the six possible bucket pairs, chosen after the fact, so it overstates the evidence. (WealthyBud data · 154 calendar years · 1872–2025).
11. The 27 high-inflation years come from only 15 separate runs of consecutive years
The longest run was 1977–1981 (5 years), which averaged −0.7% real. Years in a run share conditions, so they carry less evidence than independent draws (WealthyBud data · 154 calendar years · 1872–2025).
| Inflation range | Years | Avg nominal return | Avg real return | Median real return | Years with real loss |
|---|---|---|---|---|---|
| Below 0% (falling prices) | 33 | 5.8% | 11.2% | 10.8% | 10 of 33 |
| 0% to 3% | 65 | 12.9% | 11.0% | 12.3% | 16 of 65 |
| Over 3% to 6% | 29 | 16.6% | 12.1% | 14.8% | 5 of 29 |
| Above 6% | 27 | 6.3% | −3.9% | −3.2% | 16 of 27 |
This page tests no cause. Other conditions changed alongside inflation in each episode. See interest rates and stocks for the interest-rate side.
Compare ETFs by cost and category
Which decades had the worst real returns?
The 2000s, 1910s and 1970s were the three weakest calendar decades for real stock returns, at −3.2%, −1.9% and −1.4% a year. Each decade runs from the December before it starts to its final December, so the 1910s run from December 1909 to December 1919.
12. 3 of 14 full decades (1880s–2010s) lost money after inflation
Ranking uses annualized real total return, December to December, ranked on real return rounded to 0.1 point; differences smaller than that count as ties. The next-weakest decade, the 1930s, gained 2.1% a year. The 1870s are excluded (the data start in January 1871) and the 2020s are unfinished (WealthyBud data · 1,866 months · June 2026).
The three weakest decades, worst first:
- The 2000s were the worst full decade for real returns: −3.17% a year after inflation, −0.73% nominal, with consumer prices rising 2.5% a year.
- The 1910s were the second-worst full decade for real returns: −1.93% a year after inflation, 4.53% nominal, with consumer prices rising 6.6% a year.
- The 1970s were the third-worst full decade for real returns: −1.41% a year after inflation, 5.84% nominal, with consumer prices rising 7.4% a year.
13. The 1970s lost money in real terms while prices rose 7.4% a year
Price growth across the three ran from 2.5% to 7.4% a year (multpl CPI, not seasonally adjusted, December to December), so real losses came with both low and high inflation. The 2000s lost −3.2% a year in real terms with prices rising 2.5% a year (WealthyBud data · 1,866 months · June 2026).
How much purchasing power does cash lose?
Cash held from August 1971 keeps 12.2% of its buying power by August 2026: $100 now buys what $12.18 bought then. The equivalent is $39.39 from August 1990 and $51.69 from August 2000. All figures use the seasonally adjusted CPI-U from FRED.
14. $100 of cash from August 1971 buys what $12.18 bought then, by August 2026
Prices rose 8.21-fold in 55 years: CPIAUCSL 40.7 in August 1971 and 334.131 in August 2026 (FRED) (WealthyBud data · 955 months · August 2026).
15. From August 1990: $39.39. From August 2000: $51.69
Prices rose 2.54-fold over 36 years since August 1990 and 1.93-fold over 26 years since August 2000. Each calculation divides the August index of the start year by the August 2026 index (WealthyBud data · 955 months · August 2026).
| Start month | CPIAUCSL index | Value of $100 held as cash by August 2026 | Price rise to August 2026 |
|---|---|---|---|
| August 1971 | 40.7 | $12.18 | 8.21× |
| August 1990 | 131.6 | $39.39 | 2.54× |
| August 2000 | 172.7 | $51.69 | 1.93× |
Stock returns on this page deflate with the multpl CPI (not seasonally adjusted); the two indexes are never mixed in one calculation.
Do stocks beat inflation over the long run?
Over long windows, yes in this data. 88.9% of 1,746 rolling 10-year windows and 1,625 of 1,626 rolling 20-year windows had a positive real total return, ending in June 2026. Windows overlap, so they are not independent observations, and the past does not guarantee the future.
16. 88.9% of rolling 10-year windows beat inflation
1,553 of 1,746 monthly-step windows had a real return above zero. The median was 7.0% a year, and the weakest window, ending March 2009, returned −5.9% a year. Windows overlap (WealthyBud data · 1,866 months · June 2026).
17. 1,625 of 1,626 rolling 20-year windows beat inflation
The median was 6.8% a year real. The weakest window, ending June 1921, returned −0.22% a year. With 20-year windows starting each month, the 1,626 windows cover only about 8 independent 20-year spans (WealthyBud data · 1,866 months · June 2026).
A positive real return in a window is not a promise for the next one. Bond and cash returns, and gold funds such as GLD, are outside this analysis; see gold and silver ETFs for fund data. This page does not test whether any asset protects against inflation.
What this means for investors
Judge returns after inflation. A 9.4% nominal rate shrinks to 7.1% real. Goals set in future dollars need that adjustment.
Do not read one inflation number as a stock signal. Real returns in years with inflation above 6% averaged −3.9%, but those years form only 15 separate runs. See stock market returns for the full picture.
Remember that cash erodes. $100 from August 1971 now buys what $12.18 did then. Browse companies in the stocks hub.
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