Between 1935 and 2020, the Consumer Price Index went from 13.7 to 258.811.
Cumulatively, prices increased 1789.1%, which works out to an average of
3.52% per year. Put differently, a dollar in 1935 bought what
$0.05 buys in 2020.
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.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1935 spending costs in 2020, by category:
Category
Avg. yearly inflation
$100 in 1935 →
All items (CPI-U)
3.52%
$1,889
Medical care
4.73%
$5,087
Food
3.68%
$2,155
Transportation
3.17%
$1,418
Apparel
2.06%
$568
Not shown because the BLS began these indexes after 1935: core (all items less food & energy) (1957–), energy (1957–), housing (1967–), recreation (1993–), education & communication (1993–).
Long periods are sampled every 5 years; the calculator above covers any pair of years.
The destination year: 2020
2020 was the year the pandemic rewired the price data without triggering the
inflation spike that followed it. Consumer prices rose just 1.2% for the
year, the mildest pace since 2015, as COVID-19 lockdowns emptied roads,
closed airports, and crushed energy demand. Oil told the starkest story: on
April 20, U.S. crude futures fell to about negative $37 a barrel, the first
negative settlement in the market’s history, as storage capacity ran out and no one
wanted the physical barrels. Gasoline followed it down, falling to about
$1.80 a gallon nationally that month before recovering to average $2.17 for
the year. Grocery prices moved the other way: pantry stocking and
meatpacking-plant disruptions pushed food-at-home costs up faster than
usual, a rare case of food and energy pulling the index in opposite
directions. Washington answered with the $2.2 trillion CARES Act, signed
March 27, which sent $1,200 payments to most adults and added $600 a week
to unemployment benefits as states ordered widespread business closures.
The Federal Reserve cut its policy rate to near zero in two emergency moves
that same month and pledged to buy Treasury and mortgage bonds “in the
amounts needed” to keep credit markets working, an open-ended commitment
beyond even its 2008 response. None of it showed up in the CPI yet: the
stimulus, the supply shocks, and the reopening whiplash that followed would
build into the fastest inflation in four decades over the next two years.
MLA: “Inflation from 1935 to 2020: $100 is worth $1,889 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1935-to-2020/
APA: InflationCalculator.com. Inflation from 1935 to 2020. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1935-to-2020/