Value of $100 in 1928, adjusted to 1976

What happened to prices between 1928 and 1976

Between 1928 and 1976, the Consumer Price Index went from 17.1 to 56.9. Cumulatively, prices increased 232.7%, which works out to an average of 2.54% per year. Put differently, a dollar in 1928 bought what $0.30 buys in 1976.

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.

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The destination year: 1976

Consumer prices rose 5.8% in 1976, the calmest pace since 1972, as the economy pulled out of the 1973-75 recession and price growth settled to roughly half its 1974 peak. The recovery gave Americans room to celebrate: tall ships filled New York Harbor and fireworks lit cities nationwide on July 4 for the country’s bicentennial, a rare moment of shared celebration after Vietnam and Watergate. Politically, Jimmy Carter, a former Georgia governor running as a Washington outsider, defeated incumbent Gerald Ford that November, campaigning on restoring trust in government and bringing down inflation and unemployment together. In a California garage, Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple Computer that April to sell the Apple I, a bare circuit board aimed at electronics hobbyists, a business that looked far from consequential at the time. First-class postage, which had risen to 13 cents that past December 31, held there through the year, the longest stretch without a rate change since the Postal Service’s creation. A median household earned $12,686 in 1976, a new home sold for a median $44,200, and gas averaged 59 cents a gallon. Consumer prices stood 474.7% above their 1913 level, a calm interlude before inflation turned back up.

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