How to Convert Annual Inflation to Monthly Inflation

Inflation is usually listed as an annual statistic, with the cost of purchasing goods increasing between 1 and 4 percent per year. However, there is not one day during the year when prices suddenly go up. Instead, inflation is a gradual process that occurs throughout the year. Therefore, you can present inflation as a monthly statistic. You can either calculate the average monthly inflation during a year based on its annual inflation or use the raw data to calculate the exact inflation for any given month.

From Annual Inflation

Look up the annual inflation rate for the year in question (see Resources). For example, it might be 3.85 percent.

Divide the rate by 12 to calculate the average rate for each month. For example, 3.85 percent divided by 12 is 0.321 percent per month.

Convert the inflation rate to a decimal and multiply this by the cost of a good (product) in one month to estimate its cost the next month. For example, if something sold for $50 in March, multiply 50 times 0.00321 to calculate that the price will increase by approximately 16 cents by April.

From Raw Data

Look up the consumer price index for two adjacent months (see Resources). For example, the CPI in April 2011 was 224.906 and in May 2011 it was 225.964.

Subtract the CPI of the earlier month from the CPI in the later month. In this example, 225.964 minus 224.906 is 1.058.

Divide the result by the CPI of the earlier month and multiply by 100 to calculate the monthly inflation percent. For example, 1.058 divided by 224.906 is 0.0047. Multiply by 100 to get inflation of 0.47 percent.

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