Value of $100 in 1915, adjusted to 1977

What happened to prices between 1915 and 1977

Between 1915 and 1977, the Consumer Price Index went from 10.1 to 60.6. Cumulatively, prices increased 500.0%, which works out to an average of 2.93% per year. Put differently, a dollar in 1915 bought what $0.17 buys in 1977.

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: 1977

Consumer prices rose 6.5% in 1977, ticking back up from 1976’s 5.8% as the economic recovery strengthened, wages climbed, and energy costs pushed higher again. The year opened with a warning about that energy dependence: record cold across the Midwest and Northeast in January and February strained natural gas supplies so badly that schools and factories in several states shut down for days to conserve fuel. Jimmy Carter, inaugurated that January, made energy policy a centerpiece of his presidency, and Congress created the cabinet-level Department of Energy that August to consolidate programs built up piecemeal since the 1973 oil embargo. Culture offered some relief from the anxiety: released that May, Star Wars became the highest-grossing film in history to that point, drawing lines around theater blocks for months. The year also closed an era in a different way. Elvis Presley was found dead at his Graceland home on August 16 at age 42, drawing tens of thousands of mourners to Memphis. A median household earned $13,572 in 1977, a new home sold for a median $48,800, and gas averaged 62 cents a gallon. Consumer prices stood 512.1% above their 1913 level, with the energy anxieties of the year setting up the harder shocks of 1978 and 1979.

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