Between 1914 and 1975, the Consumer Price Index went from 10 to 53.8.
Cumulatively, prices increased 438.0%, which works out to an average of
2.80% per year. Put differently, a dollar in 1914 bought what
$0.19 buys in 1975.
Consumer prices barely moved in 1914, rising just 1.0% for the year, even as
the country’s financial plumbing was rebuilt from the ground up. The Federal
Reserve Banks, created by the Federal Reserve Act signed the previous
December, opened their doors on November 16, giving the U.S. a central bank
for the first time since the 1830s. Weeks earlier, the outbreak of war in
Europe had spooked the New York Stock Exchange into closing for more than
four months, the longest shutdown in its history, as officials worried
European investors would dump American securities for gold. Domestically, the
bigger story was labor: Henry Ford’s decision to pay factory workers $5 a
day, announced in January, roughly doubled wages on his assembly lines and
pushed other manufacturers to raise pay just to keep workers from leaving. A
first-class stamp still cost 2 cents, a price that had held since 1885 and
would keep holding for three more years, even as the war reshaping Europe
began pulling the American economy toward the sustained wartime inflation of
1917.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1914 spending costs in 1975, by category:
Category
Avg. yearly inflation
$100 in 1914 →
All items (CPI-U)
2.80%
$538
Food
2.94%
$586
Apparel
2.62%
$483
Not shown because the BLS began these indexes after 1914: core (all items less food & energy) (1957–), energy (1957–), housing (1967–), medical care (1935–), transportation (1935–), recreation (1993–), education & communication (1993–).
Long periods are sampled every 5 years; the calculator above covers any pair of years.
The destination year: 1975
Consumer prices rose 9.1% in 1975, easing slightly from 1974’s
11.0% but still running far above anything the country had experienced before
the decade began. The recession that started in November 1973, the deepest
since the Great Depression, bottomed out that March, yet unemployment kept
climbing through the year and touched 9%, a combination of high inflation and
high joblessness that had no precedent in the postwar data. Vietnam ended
that April 30, when North Vietnamese forces captured Saigon and the last
Americans were evacuated by helicopter from the U.S. embassy roof. Fiscal
strain hit closer to home too: New York City, facing bankruptcy after years
of borrowing to paper over budget gaps, asked Washington for help that
October. President Ford’s initial refusal produced the Daily News headline
“Ford to City: Drop Dead,” though he ultimately signed a federal loan package
that December. Amid the gloom, Bill Gates and Paul Allen founded Microsoft
that April in Albuquerque, New Mexico, to sell a version of the BASIC
programming language for the Altair 8800, one of the first personal
computers sold to hobbyists. A median household earned $11,800 in 1975, a new
home sold for a median $39,300, and first-class postage held at 10 cents,
unchanged since 1974’s increase. Consumer prices stood 443.4%
above their 1913 level, with the decade barely past its
midpoint.
MLA: “Inflation from 1914 to 1975: $100 is worth $538 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1914-to-1975/
APA: InflationCalculator.com. Inflation from 1914 to 1975. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1914-to-1975/