Between 1916 and 1961, the Consumer Price Index went from 10.9 to 29.9.
Cumulatively, prices increased 174.3%, which works out to an average of
2.27% per year. Put differently, a dollar in 1916 bought what
$0.36 buys in 1961.
1916 was when World War I first showed up clearly in American price tags.
Consumer prices rose 7.9% for the year, easily the sharpest increase since
the Bureau of Labor Statistics’ CPI history begins in 1913, as factories ran
flat out to fill steel, munitions, and food orders from Britain and France.
Railroad workers felt the squeeze from rising living costs enough to threaten
a nationwide strike; Congress headed it off in September with the Adamson
Act, which set an eight-hour standard workday for interstate rail employees,
the first federal law of its kind covering private-sector hours. Washington
was also preparing more directly for war: the National Defense Act, signed
in June, expanded the Army and National Guard and funded new
government-owned munitions plants, adding another source of demand to an
economy already running hot. Woodrow Wilson won re-election in November
largely on having kept the country out of the fighting so far, a promise
that would not survive the following spring. A first-class stamp still cost
2 cents, one of the few prices that had not yet moved.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1916 spending costs in 1961, by category:
Category
Avg. yearly inflation
$100 in 1916 →
All items (CPI-U)
2.27%
$274
Apparel
2.27%
$274
Food
2.22%
$269
Not shown because the BLS began these indexes after 1916: 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 2 years; the calculator above covers any pair of years.
The destination year: 1961
Consumer prices rose 1.0% in 1961, down from 1960’s 1.7% as
the economy climbed out of recession, a recovery the National Bureau of
Economic Research dates to that February. Politically, the year opened
with a changing of the guard: outgoing president Dwight Eisenhower’s
farewell address on January 17 warned of a growing “military-industrial
complex,” and three days later John F. Kennedy was sworn in, urging
Americans to “ask not what your country can do for you.” The new
administration’s first major foreign-policy test came quickly and badly:
a CIA-organized force of Cuban exiles landed at the Bay of Pigs on April
17 aiming to topple Fidel Castro, and without the U.S. air support Kennedy
withheld, the invasion collapsed within three days. Cold War tensions
hardened further that August, when East German forces sealed the border
between East and West Berlin overnight, building what would become the
Berlin Wall and stopping the flow of refugees to the West. Domestically,
the wage floor moved for the first time in five years: the Fair Labor
Standards Amendments of 1961, effective that September, raised the
minimum wage to $1.15 an hour and extended coverage to roughly 3.6 million
additional workers. Consumer prices finished 1961 202.0% above their
1913 level. First-class postage held at 4 cents.
MLA: “Inflation from 1916 to 1961: $100 is worth $274 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1916-to-1961/
APA: InflationCalculator.com. Inflation from 1916 to 1961. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1916-to-1961/