Value of $100 in 1922, adjusted to 1927

What happened to prices between 1922 and 1927

Between 1922 and 1927, the Consumer Price Index went from 16.8 to 17.4. Cumulatively, prices increased 3.6%, which works out to an average of 0.70% per year. Put differently, a dollar in 1922 bought what $0.97 buys in 1927.

Consumer prices fell another 6.1% in 1922, the second straight year of decline, even as the broader economy climbed out of the Depression of 1920-21 and industrial production rebounded. The CPI had now given back roughly a third of its wartime runup, though it stayed well above the 1913 baseline. Congress moved to shield that recovery from foreign competition: the Fordney-McCumber Tariff Act, signed September 21, raised duties on hundreds of imported goods to some of the highest levels in U.S. history, a policy meant to protect farmers and manufacturers still adjusting to postwar prices. Labor tension flared even as prices fell. Roughly half a million bituminous coal miners struck that April over wage cuts employers had imposed as prices dropped, and hundreds of thousands of railroad shop workers walked out in July in a separate dispute over pay and work rules, together the largest strike wave since 1919. Both disputes dragged on for months and drew federal mediation before ending without full concessions for the workers. First-class postage remained at 2 cents.

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The destination year: 1927

Consumer prices fell 1.7% in 1927, a mild retreat after three years of gradual increases and part of a shallow up-and-down pattern that ran through the second half of the decade. Aviation delivered the year’s signature moment: Charles Lindbergh departed Roosevelt Field, New York, on May 20 and landed at Le Bourget Field outside Paris roughly 33.5 hours later, the first person to fly the Atlantic solo and nonstop. Detroit closed a chapter of its own that May, when Ford halted the Model T’s production line after nearly 19 years and more than 15 million cars sold, idling tens of thousands of workers while its factories retooled for the Model A. The Federal Reserve, meeting with European central bankers that summer, cut its discount rate to ease pressure on currencies still recovering from the war, a move later cited by economists including Milton Friedman and Anna Schwartz as fuel for the stock market speculation that built through the following two years. First-class postage held at 2 cents.

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