Value of $100 in 1917, adjusted to 1936

What happened to prices between 1917 and 1936

Between 1917 and 1936, the Consumer Price Index went from 12.8 to 13.9. Cumulatively, prices increased 8.6%, which works out to an average of 0.43% per year. Put differently, a dollar in 1917 bought what $0.92 buys in 1936.

1917 is when World War I inflation stopped being a background trend and became the dominant fact of American economic life. Consumer prices rose 17.4% for the year, more than double the previous year’s already sharp increase, as the country’s April 6 entry into the war layered federal war spending on top of an economy already strained by military demand and worker shortages. Congress paid for the war with the War Revenue Act that October, which sharply raised income taxes, created a new tax on wartime business profits, and, in a small but very visible change for ordinary households, raised the cost of a first-class stamp from 2 cents to 3 cents that November, the rate’s first move since 1885. Herbert Hoover took over the new Food Administration in August and asked Americans to conserve food voluntarily rather than face formal rationing, a campaign that became famous enough that “Hooverize” entered the language as a verb for cutting back. None of it slowed prices much: the 17.4% increase would be topped again the very next year, in 1918.

More about inflation in 1917 →

The destination year: 1936

Consumer prices rose 1.5% in 1936, a third straight annual increase and part of a slow, steady climb back from the 1933 trough, though prices and the broader economy still had not fully recovered to their pre-Depression levels. Voters delivered their verdict on that recovery in November, reelecting Franklin D. Roosevelt over Republican Alf Landon in one of the most lopsided elections in U.S. history: Roosevelt carried 46 of 48 states and won the Electoral College 523 to 8, a broad public endorsement of the New Deal. Public works kept advancing that year, too. Hoover Dam, one of the era’s signature projects, had been dedicated in September 1935, but its first generators did not begin sending electricity over transmission lines to Los Angeles until October 1936, a milestone that showed how long even a celebrated project took to reach full operation. Consumer prices ended the year 40.4% above their 1913 level, still 18.7% below the 1929 peak, a gap that would keep narrowing until a sharp new recession interrupted the recovery the following year. First-class postage held at 3 cents.

More about inflation in 1936 →