Between 1930 and 1974, the Consumer Price Index went from 16.7 to 49.3.
Cumulatively, prices increased 195.2%, which works out to an average of
2.49% per year. Put differently, a dollar in 1930 bought what
$0.34 buys in 1974.
Consumer prices fell 2.3% in 1930, a mild decline compared with what was
coming but the first sign that the summer 1929 downturn was not going to be
short. The National Bureau of Economic Research dates that contraction from
August 1929, and by the time it finally bottomed out in March 1933 it would
run 43 months, the longest of any downturn in the NBER’s chronology back to
1854. Congress made the trade picture worse in June, when President Hoover
signed the Smoot-Hawley Tariff Act, raising duties on more than 20,000
imported goods to some of the highest levels in a century. Trading partners
retaliated with tariffs of their own, and global trade volumes collapsed
over the next several years, deepening a downturn economists still debate
how much the tariff itself worsened. The financial system cracked that fall:
a regional banking panic culminated in the December 11 failure of the Bank
of United States in New York, at the time the largest bank failure in
American history, wiping out more than $200 million in deposits. It was the
first of four banking panics that would hit the country before 1933 was
out. Consumer prices still stood 68.7% above their 1913
starting point, but the direction had clearly turned. First-class postage
held at 2 cents, unchanged for eleven straight years.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1930 spending costs in 1974, by category:
Category
Avg. yearly inflation
$100 in 1930 →
All items (CPI-U)
2.49%
$295
Food
2.91%
$353
Apparel
2.42%
$287
Not shown because the BLS began these indexes after 1930: core (all items less food & energy) (1957–), energy (1957–), housing (1967–), medical care (1935–), transportation (1935–), recreation (1993–), education & communication (1993–).
Long periods are sampled every 2 years; the calculator above covers any pair of years.
The destination year: 1974
1974 was the year the postwar economy broke its old rules. Consumer prices
rose 11.0%, the fastest annual increase since 1947, as the Arab oil embargo
that ran from October 1973 to March 1974 roughly quadrupled the price of
crude oil worldwide. Gasoline, which had averaged 38.5 cents a gallon in
1973, jumped to 53.2 cents, and shortages forced many states into odd-even
rationing at the pump. Nixon’s wage and price controls, in place in some form
since 1971, expired at the end of April, removing the last brake on prices
just as the oil shock hit. Nixon himself resigned in August over Watergate,
and Gerald Ford’s response to inflation, a voluntary “Whip Inflation Now”
campaign built around lapel buttons, became a symbol of how little
conventional politics could do against the problem. Prices kept climbing even
as the economy weakened: a recession that started in November 1973 dragged
on, the Dow fell to a bear-market bottom of 577.60 in December, and
unemployment was already rising toward the 9% it would reach in 1975. The
combination of rising prices and a shrinking economy gave the decade its
name: stagflation.
MLA: “Inflation from 1930 to 1974: $100 is worth $295 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1930-to-1974/
APA: InflationCalculator.com. Inflation from 1930 to 1974. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1930-to-1974/