Between 1914 and 2020, the Consumer Price Index went from 10 to 258.811.
Cumulatively, prices increased 2488.1%, which works out to an average of
3.12% per year. Put differently, a dollar in 1914 bought what
$0.04 buys in 2020.
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 2020, by category:
Category
Avg. yearly inflation
$100 in 1914 →
All items (CPI-U)
3.12%
$2,588
Food
3.13%
$2,620
Apparel
1.97%
$787
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: 2020
2020 was the year the pandemic rewired the price data without triggering the
inflation spike that followed it. Consumer prices rose just 1.2% for the
year, the mildest pace since 2015, as COVID-19 lockdowns emptied roads,
closed airports, and crushed energy demand. Oil told the starkest story: on
April 20, U.S. crude futures fell to about negative $37 a barrel, the first
negative settlement in the market’s history, as storage capacity ran out and no one
wanted the physical barrels. Gasoline followed it down, falling to about
$1.80 a gallon nationally that month before recovering to average $2.17 for
the year. Grocery prices moved the other way: pantry stocking and
meatpacking-plant disruptions pushed food-at-home costs up faster than
usual, a rare case of food and energy pulling the index in opposite
directions. Washington answered with the $2.2 trillion CARES Act, signed
March 27, which sent $1,200 payments to most adults and added $600 a week
to unemployment benefits as states ordered widespread business closures.
The Federal Reserve cut its policy rate to near zero in two emergency moves
that same month and pledged to buy Treasury and mortgage bonds “in the
amounts needed” to keep credit markets working, an open-ended commitment
beyond even its 2008 response. None of it showed up in the CPI yet: the
stimulus, the supply shocks, and the reopening whiplash that followed would
build into the fastest inflation in four decades over the next two years.
MLA: “Inflation from 1914 to 2020: $100 is worth $2,588 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1914-to-2020/
APA: InflationCalculator.com. Inflation from 1914 to 2020. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1914-to-2020/