Value of $100 in 1929, adjusted to 1943

What happened to prices between 1929 and 1943

Between 1929 and 1943, the Consumer Price Index went from 17.1 to 17.3. Cumulatively, prices increased 1.2%, which works out to an average of 0.08% per year. Put differently, a dollar in 1929 bought what $0.99 buys in 1943.

Consumer prices were unchanged in 1929, the CPI’s annual average flat for the second time in six years and a fitting close to a decade that began with wartime inflation and ended in rough price stability. By year’s end the index stood 14.5% below its 1920 peak and roughly 73% above its 1913 starting point, a reminder that even a “stable” decade left prices well above where they had started. The stability in the cost of living masked what was building in financial markets. The National Bureau of Economic Research dates the start of the Great Depression to that August, the month the business cycle peaked, months before most Americans noticed anything was wrong. The break came that October: panic selling hit Wall Street on Black Thursday, October 24, and returned even worse on Black Tuesday, October 29, when the Dow Jones Industrial Average fell about 12% in a single session. Billions of dollars in paper wealth disappeared within days, and the crash marked the start of a downturn that would pull consumer prices into their steepest sustained decline of the 20th century over the next four years. First-class postage was still 2 cents, a price that would hold until 1932.

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The destination year: 1943

Consumer prices rose 6.1% in 1943, a slower pace than 1942’s surge but still well above anything the country had seen before the war. The slowdown owed largely to the “Hold the Line” order, issued that April, which froze most wages, prices, and rents at their current levels after the previous year’s jump showed how far demand had outrun the existing controls. Rationing grew more sophisticated alongside the freeze: starting in February, a points system split scarce goods into red points for meat, butter, and other fats and blue points for canned and processed foods, letting households budget across categories instead of simply going without once a flat quota ran dry. The government also changed how it collected the taxes paying for all of it. The Current Tax Payment Act, signed June 9, required employers to withhold federal income tax directly from paychecks for the first time, smoothing the flow of wartime revenue and creating the pay-as-you-go system still used today. Consumer prices stood 74.7% above their 1913 level and 33.1% above 1933’s Depression-era low. First-class postage held at 3 cents, and the minimum wage stayed at 30 cents an hour.

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