Value of $100 in 1935, adjusted to 1946

What happened to prices between 1935 and 1946

Between 1935 and 1946, the Consumer Price Index went from 13.7 to 19.5. Cumulatively, prices increased 42.3%, which works out to an average of 3.26% per year. Put differently, a dollar in 1935 bought what $0.70 buys in 1946.

Consumer prices rose 2.2% in 1935, a second straight annual increase after 1934’s turnaround, though the CPI still sat well below its 1929 peak and the recovery remained uneven and incomplete. The year’s biggest legislative achievements aimed at making that unevenness less punishing. Roosevelt signed the Social Security Act on August 14, creating federal old-age pensions and unemployment insurance funded by a new payroll tax, the first federal safety net of its kind in U.S. history. That spring, the Works Progress Administration had already begun putting millions of unemployed Americans to work on public construction, arts, and infrastructure projects, becoming the largest jobs program of the New Deal. Congress added labor protections to the mix that July with the National Labor Relations Act, guaranteeing most private-sector workers the right to organize and bargain collectively. The human cost of the Dust Bowl was still mounting on the Plains: the storm known as Black Sunday hit on April 14, one of the worst of the decade, and continued drought kept driving farm families off land that could no longer support them. Consumer prices ended the year 38.4% above their 1913 level. First-class postage held at 3 cents.

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The destination year: 1946

Consumer prices rose 8.3% in 1946, up sharply from 1945’s 2.3% and the sharpest increase since 1942, as wartime price controls finally came apart. Congress let the Office of Price Administration’s authority lapse at the end of June, reinstated a weaker version soon after, then wound the whole system down through the rest of the year, releasing years of pent-up demand into the price level almost at once. Meat was the clearest casualty of the fight over decontrol: farmers withheld livestock rather than sell at capped prices, producing severe shortages that spring and summer until ceilings on meat were lifted that October, after which supplies reappeared almost overnight. Labor cashed in its own wartime restraint the same year. An estimated 4.6 million workers walked out at some point in 1946, hitting steel, coal, automakers, and the railroads in the largest strike wave in U.S. history, as unions pushed for wage gains to offset cost-of-living increases controls could no longer contain. Amid the turmoil, Congress made a less visible but lasting change to economic policy: the Employment Act of 1946, signed that February, committed the federal government to promoting maximum employment and created the Council of Economic Advisers. Consumer prices stood 97.0% above their 1913 level, nearly double where the index had started 33 years earlier. First-class postage held at 3 cents, and the minimum wage stayed at 40 cents an hour.

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