Between 1921 and 1980, the Consumer Price Index went from 17.9 to 82.4.
Cumulatively, prices increased 360.3%, which works out to an average of
2.62% per year. Put differently, a dollar in 1921 bought what
$0.22 buys in 1980.
Consumer prices fell 10.5% in 1921, the mirror image of the wartime
inflation that had more than doubled the cost of living between
1913 and 1920. The Depression of 1920-21, one
of the sharpest contractions in U.S. history, bottomed out that July
according to the National Bureau of Economic Research, even though it had
lasted barely eighteen months. Unemployment climbed toward one worker in ten
as businesses cut production and prices to work through wartime inventories,
but the same collapse in prices also meant the recovery, once it started,
had room to run without reigniting inflation. Warren Harding took office
March 4, promising a return to “normalcy” after a decade of war, pandemic,
labor unrest, and rapid price swings; his administration moved quickly to
cut top income tax rates and federal spending. Congress also acted on
immigration that year: the Emergency Quota Act, signed May 19, capped annual
arrivals from each country at 3% of that nationality’s population in the
1910 census, the first time the United States had set a numerical ceiling on
immigration. The law favored northern and western Europe and cut total
immigration by more than half compared with prewar levels; Congress
tightened the formula again in 1924. First-class postage held at 2 cents,
unchanged since mid-1919.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1921 spending costs in 1980, by category:
Category
Avg. yearly inflation
$100 in 1921 →
All items (CPI-U)
2.62%
$460
Food
2.92%
$546
Apparel
1.72%
$274
Not shown because the BLS began these indexes after 1921: 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: 1980
1980 sat at the very peak of the Great Inflation. Prices rose 13.5% in that
single year, mortgage rates were climbing toward 16%, and the Federal Reserve
under Paul Volcker was administering the painful interest-rate medicine that
would finally break the inflationary spiral, at the cost of the deep 1981–82
recession. No single year looms larger in how Americans think about inflation.
MLA: “Inflation from 1921 to 1980: $100 is worth $460 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1921-to-1980/
APA: InflationCalculator.com. Inflation from 1921 to 1980. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1921-to-1980/