Value of $100 in 1928, adjusted to 1990

What happened to prices between 1928 and 1990

Between 1928 and 1990, the Consumer Price Index went from 17.1 to 130.7. Cumulatively, prices increased 664.3%, which works out to an average of 3.33% per year. Put differently, a dollar in 1928 bought what $0.13 buys in 1990.

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: 1990

In 1990, the median U.S. household earned about $29,900, gas averaged $1.15 a gallon, and mailing a letter cost a quarter. Inflation ran hot at 5.4% for the year, its highest rate since 1982, pushed up by an oil shock after Iraq’s invasion of Kuwait, and the economy tipped into recession that summer. It was the last gasp of elevated inflation before the long calm of the 1990s.

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