Value of $100 in 1927, adjusted to 1963

What happened to prices between 1927 and 1963

Between 1927 and 1963, the Consumer Price Index went from 17.4 to 30.6. Cumulatively, prices increased 75.9%, which works out to an average of 1.58% per year. Put differently, a dollar in 1927 bought what $0.57 buys in 1963.

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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The destination year: 1963

Consumer prices rose 1.3% in 1963, up slightly from 1962’s 1.0% as the expansion entered its third year with inflation still low, conditions that gave Kennedy room to push the large tax cut he had proposed to Congress. The cost of a first-class stamp rose that January 7, to 5 cents from 4 cents, the first postal rate change since 1958. That August 28, Martin Luther King Jr. delivered his “I Have a Dream” speech from the steps of the Lincoln Memorial to a quarter million people gathered for the March on Washington, building pressure on Congress to pass the civil rights bill Kennedy had proposed that June. The year ended in tragedy: Kennedy was assassinated while riding in a motorcade through Dallas on November 22, and Lyndon B. Johnson was sworn in aboard Air Force One that same afternoon. Johnson would spend the following year pushing Kennedy’s stalled tax and civil rights agenda through Congress. The minimum wage rose again that September, to $1.25 an hour, the second step of the phased increase set two years earlier. Consumer prices finished 1963 209.1% above their 1913 level.

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