Value of $100 in 1919, adjusted to 1977

What happened to prices between 1919 and 1977

Between 1919 and 1977, the Consumer Price Index went from 17.3 to 60.6. Cumulatively, prices increased 250.3%, which works out to an average of 2.18% per year. Put differently, a dollar in 1919 bought what $0.29 buys in 1977.

The fighting in Europe ended in November 1918, but American prices kept climbing through 1919 almost as fast as they had during the war itself, rising 14.6% for the year. Wartime price and production controls were being dismantled, millions of soldiers were returning to the civilian labor market, and demand that had been held back for years ran into supply that had not caught up, a combination that kept the cost of living rising even with the guns silent. Workers, whose pay had fallen behind three straight years of double-digit inflation, pushed back: a general strike shut down Seattle in February, Boston’s police force walked out in September, and a nationwide steel strike that same month drew in roughly 350,000 workers and ran into the following January. One price did fall that year: first-class postage reverted to 2 cents on July 1, ending the wartime 3-cent rate that had funded part of the war effort since late 1917. By year’s end, prices had risen close to 75% since the CPI’s 1913 starting point, compressing more than a decade of typical peacetime inflation into six years of war and its aftermath.

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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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