Value of $100 in 1932, adjusted to 1955

What happened to prices between 1932 and 1955

Between 1932 and 1955, the Consumer Price Index went from 13.7 to 26.8. Cumulatively, prices increased 95.6%, which works out to an average of 2.96% per year. Put differently, a dollar in 1932 bought what $0.51 buys in 1955.

Consumer prices fell 9.9% in 1932, the steepest single-year drop in the CPI’s history to that point and the third straight year of decline following 1930 and 1931. Wages, farm incomes, and industrial output all kept falling, and Congress tried to arrest the credit collapse by creating the Reconstruction Finance Corporation that January, capitalized at $500 million with authority to borrow up to $1.5 billion to lend directly to banks, railroads, and other struggling businesses. Relief did not reach ordinary households as quickly. That summer, tens of thousands of World War I veterans and their families camped in Washington demanding early payment of a service bonus not due until 1945; in July, U.S. Army troops under General Douglas MacArthur forcibly dispersed the encampment, an episode that badly damaged the Hoover administration’s standing months before an election it was already losing. Voters delivered their verdict on November 8, electing Franklin D. Roosevelt in a landslide over the incumbent Hoover on a promise of relief and a “new deal for the American people.” Roosevelt would not take office until the following March, leaving a long and difficult transition during the depths of the crisis. First-class postage rose from 2 cents to 3 cents on July 6, the first change to the rate since 1919.

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The destination year: 1955

Consumer prices fell 0.4% in 1955, the first annual decline since 1949, as a strong rebound from the 1953-54 recession delivered growth without much price pressure; automakers and appliance makers competed hard on price for a booming consumer market. Organized labor consolidated that December, when the American Federation of Labor and the Congress of Industrial Organizations merged on the 5th under President George Meany, uniting roughly 15 million workers in the AFL-CIO after two decades as rival federations. That same day, a different kind of organizing began in Montgomery, Alabama: four days after Rosa Parks was arrested for refusing to give up her bus seat to a white passenger, the city’s Black community began a boycott of its buses that would last more than a year and help launch the civil rights movement’s mass phase. Markets got a scare that September: news of Eisenhower’s heart attack on the 24th sent the Dow Jones Industrial Average to its steepest one-day drop since the 1929 crash when trading resumed that Monday, before stocks recovered as the president’s health improved. Consumer prices finished 1955 170.7% above their 1913 level, essentially unchanged from where they stood a year earlier. First-class postage held at 3 cents, and the minimum wage stayed at 75 cents an hour.

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