Value of $100 in 1915, adjusted to 1976

What happened to prices between 1915 and 1976

Between 1915 and 1976, the Consumer Price Index went from 10.1 to 56.9. Cumulatively, prices increased 463.4%, which works out to an average of 2.87% per year. Put differently, a dollar in 1915 bought what $0.18 buys in 1976.

Consumer prices rose 1.0% in 1915, the second straight year of near-flat inflation before the wartime price surges of 1916 through 1918. The year’s defining event had nothing to do with prices directly: a German submarine sank the British liner Lusitania off the Irish coast on May 7, killing 128 Americans and hardening U.S. opinion against Germany two years before the country entered the war. Economically, 1915 was a turning point of a different kind. A recession that had dragged on since 1913 began lifting as Britain and France placed growing orders for steel, munitions, and other war materiel with American manufacturers, and U.S. exports to the Allied powers climbed sharply through the year. That demand would keep building through 1916, eventually pulling prices up with it. On the regulatory side, the Federal Trade Commission opened for business in March, taking on enforcement of the Clayton Antitrust Act that Congress had passed the previous fall. A first-class stamp still cost 2 cents, unchanged since 1885 and still two years from its first wartime increase.

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The destination year: 1976

Consumer prices rose 5.8% in 1976, the calmest pace since 1972, as the economy pulled out of the 1973-75 recession and price growth settled to roughly half its 1974 peak. The recovery gave Americans room to celebrate: tall ships filled New York Harbor and fireworks lit cities nationwide on July 4 for the country’s bicentennial, a rare moment of shared celebration after Vietnam and Watergate. Politically, Jimmy Carter, a former Georgia governor running as a Washington outsider, defeated incumbent Gerald Ford that November, campaigning on restoring trust in government and bringing down inflation and unemployment together. In a California garage, Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple Computer that April to sell the Apple I, a bare circuit board aimed at electronics hobbyists, a business that looked far from consequential at the time. First-class postage, which had risen to 13 cents that past December 31, held there through the year, the longest stretch without a rate change since the Postal Service’s creation. A median household earned $12,686 in 1976, a new home sold for a median $44,200, and gas averaged 59 cents a gallon. Consumer prices stood 474.7% above their 1913 level, a calm interlude before inflation turned back up.

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