Value of $100 in 1917, adjusted to 2012

What happened to prices between 1917 and 2012

Between 1917 and 2012, the Consumer Price Index went from 12.8 to 229.594. Cumulatively, prices increased 1693.7%, which works out to an average of 3.09% per year. Put differently, a dollar in 1917 bought what $0.06 buys in 2012.

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 →