Annual-Average vs Year-End Comparator
Compare alternative period definitions.
Annual-Average vs Year-End Comparator: Scenario Inputs
Annual percentage rate or benchmark index change.
Inflation & Purchasing Power Analysis
Over 3 years at 3.5% inflation, a $75,000 salary requires $83,154 to retain equal purchasing power. Without matching raises, your real compensation experiences an effective reduction of $7,355 (-9.81%).
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How Annual-Average vs Year-End Comparator Works?
The Annual-Average vs Year-End Comparator calculates both rates for each year. It applies each rate to the same salary so the effect of the chosen measure is clear.
Pick the years
Choose 1 year or a span of years.
Load both measures
The comparator reads annual averages and December values.
Compute both rates
The comparator calculates annual-average inflation and December-to-December inflation.
Compare salary results
The output shows the adjusted salary under each method and the gap.
Annual-Average vs Year-End Comparator Formula
The Annual-Average vs Year-End Comparator formula computes 2 ratios from the same index series.
AA % = (Avg CPIt ÷ Avg CPIt−1 − 1) × 100
Dec/Dec % = (CPIDec, t ÷ CPIDec, t−1 − 1) × 100
Variables
- Avg CPIt
- Mean of the 12 monthly values in year t
- CPIDec, t
- December value in year t
Worked example
For 2021, a $70,000 salary adjusted by annual-average inflation (4.7%) becomes $73,290. Adjusted by year-end inflation (7.0%), the salary becomes $74,900, a gap of $1,610.
Annual-Average vs Year-End Comparator Conversion Table
This table compares the 2 CPI-U measures for 4 years and applies each to a $70,000 salary.
| Year | Annual-average inflation | Dec/Dec inflation | Salary (annual-average) | Salary (Dec/Dec) | Gap |
|---|---|---|---|---|---|
| 2021 | 4.7% | 7.0% | $73,290 | $74,900 | +$1,610 |
| 2022 | 8.0% | 6.5% | $75,600 | $74,550 | -$1,050 |
| 2023 | 4.1% | 3.4% | $72,870 | $72,380 | -$490 |
| 2024 | 2.9% | 2.9% | $72,030 | $72,030 | +$0 |
Rates: U.S. Bureau of Labor Statistics, CPI-U. Each row applies 1 year of inflation to the base salary.
What is Annual-Average vs Year-End Comparator?
The Annual-Average vs Year-End Comparator is a tool that compares inflation measured with annual averages against inflation measured from December to December, and shows the salary effect of each. The 2 methods give different rates in years when inflation speeds up or slows down.
The U.S. Bureau of Labor Statistics (BLS) publishes both figures. CPI-U inflation for 2021 was 4.7% on an annual-average basis and 7.0% on a December-to-December basis.
What are the uses of Annual-Average vs Year-End Comparator?
There are 4 main uses of the Annual-Average vs Year-End Comparator.
Pick the right method
Choose the measure that matches how a salary or contract is defined.
Explain different numbers
Show why 2 sources quote different inflation for the same year.
Time raises
See which measure favors a January raise during rising inflation.
Write clear contracts
Name the exact measure in an escalation clause.
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