According to the Consumer Price Index, how much purchasing power does one U.S. dollar have today compared to what it had in 1970?
One dollar in 2021 has the same purchasing power as 14 cents in 1970, according to the Consumer Price Index. This means that the dollar has lost about 86% of its purchasing power over the past 51 years. The main driver of inflation is government creating and circulating more money than its economy needs. This causes the purchasing power of currency to shrink and prices to increase. Market forces can also have inflationary effects when there is a sudden increased demand for certain products/services or a shortage of them.