Value of $100 in 1923, adjusted to 1928

What happened to prices between 1923 and 1928

Between 1923 and 1928, the Consumer Price Index went from 17.1 to 17.1. Cumulatively, prices increased 0.0%, which works out to an average of 0.00% per year. Put differently, a dollar in 1923 bought what $1.00 buys in 1928.

Consumer prices rose 1.8% in 1923, the first increase since 1920 and a sign the postwar deflation had run its course; the economy settled into the steadier growth that defined much of the rest of the decade. The year’s biggest shock was political rather than economic: Warren Harding died August 2 in San Francisco while returning from a trip to Alaska, and Vice President Calvin Coolidge was sworn in the next day at his family’s farmhouse in Plymouth Notch, Vermont, administered the oath of office by his own father, a notary public, by lamplight. Coolidge would go on to preside over the low, stable inflation of the “Roaring Twenties.” The contrast with Germany that year was stark. The Weimar Republic’s currency collapse reached its peak in November 1923, with prices doubling every few days and a loaf of bread costing billions of marks; Germany introduced a new currency, the Rentenmark, that month to halt the spiral. U.S. consumer prices, by comparison, had moved in single digits or held flat every year since 1921, a gap that shaped how American economists would later think about what made the postwar inflation of Europe so different from the mild swings at home. First-class postage stayed at 2 cents.

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The destination year: 1928

Consumer prices fell 1.7% in 1928, the second straight year of mild decline even as the stock market climbed sharply, a widening gap between asset prices and the cost of living that later economists pointed to as an early warning sign. The Federal Reserve tightened policy repeatedly over the year, raising its discount rate in an effort to slow the flood of borrowed money pouring into stock purchases without derailing the broader economy, a balancing act it ultimately failed to manage. Herbert Hoover won the presidential election that November, defeating Democrat Al Smith on a platform built around continuing the prosperity of the Coolidge years; few voters or policymakers anticipated how quickly that prosperity would end. First-class postage remained at 2 cents, a price that had now held for nine straight years.

More about inflation in 1928 →