Value of $100 in 1913, adjusted to 1947

What happened to prices between 1913 and 1947

Between 1913 and 1947, the Consumer Price Index went from 9.9 to 22.3. Cumulatively, prices increased 125.3%, which works out to an average of 2.42% per year. Put differently, a dollar in 1913 bought what $0.44 buys in 1947.

1913 is where this site’s price history begins, because it’s where the Bureau of Labor Statistics’ own consumer price data begins. The CPI wasn’t published in real time back then; the BLS built the earliest index retroactively from retail price records collected starting in 1913, which makes every dollar figure on this site ultimately anchored to that year’s prices. It was also the year the machinery of modern federal economic policy was built. The 16th Amendment, ratified in February, cleared the constitutional path for a federal income tax, and the Revenue Act that followed in October imposed a top rate of just 7% on income above $500,000, a narrow tax that would later be reshaped into the broad-based system that funds the government today. In December, Congress passed the Federal Reserve Act, creating the central bank that would eventually take on fighting inflation as one of its core jobs, including the 19%-plus interest rates it deployed against the 1970s and early 1980s price surge. Consumer life in 1913 was correspondingly simple by later standards: a first-class stamp cost 2 cents, a price that held from 1885 all the way to 1917, and the Ford Motor Company introduced the moving assembly line at its Highland Park plant that year, a manufacturing breakthrough that would spend the next decade driving down the cost of a car faster than prices elsewhere were rising.

More about inflation in 1913 →

The destination year: 1947

Consumer prices rose 14.4% in 1947, up from 1946’s 8.3% and the fastest annual increase since 1920, as the last of the wartime price controls disappeared and a year of strikes, wage catch-up, and lingering shortages hit consumers all at once. Congress answered the previous year’s strike wave that June, overriding President Truman’s veto to pass the Taft-Hartley Act, which banned secondary boycotts and the closed shop and let states adopt “right-to-work” laws curbing union power. American attention was also turning outward. In a June 5 speech at Harvard, Secretary of State George Marshall outlined a U.S.-funded plan to rebuild Western Europe’s economies, an effort that would become known as the Marshall Plan once Congress funded it the following year. The government reorganized itself for the confrontation with the Soviet Union that plan was partly designed to prevent: the National Security Act, signed July 26, created the Department of Defense, the Air Force as a separate service, the Central Intelligence Agency, and the National Security Council. Consumer prices stood 125.3% above their 1913 level and 30.4% above 1929’s pre-Depression peak, up from just 1.2% above it four years earlier. First-class postage held at 3 cents, and the minimum wage stayed at 40 cents an hour.

More about inflation in 1947 →