Value of $100 in 1936, adjusted to 1965

What happened to prices between 1936 and 1965

Between 1936 and 1965, the Consumer Price Index went from 13.9 to 31.5. Cumulatively, prices increased 126.6%, which works out to an average of 2.86% per year. Put differently, a dollar in 1936 bought what $0.44 buys in 1965.

Consumer prices rose 1.5% in 1936, a third straight annual increase and part of a slow, steady climb back from the 1933 trough, though prices and the broader economy still had not fully recovered to their pre-Depression levels. Voters delivered their verdict on that recovery in November, reelecting Franklin D. Roosevelt over Republican Alf Landon in one of the most lopsided elections in U.S. history: Roosevelt carried 46 of 48 states and won the Electoral College 523 to 8, a broad public endorsement of the New Deal. Public works kept advancing that year, too. Hoover Dam, one of the era’s signature projects, had been dedicated in September 1935, but its first generators did not begin sending electricity over transmission lines to Los Angeles until October 1936, a milestone that showed how long even a celebrated project took to reach full operation. Consumer prices ended the year 40.4% above their 1913 level, still 18.7% below the 1929 peak, a gap that would keep narrowing until a sharp new recession interrupted the recovery the following year. First-class postage held at 3 cents.

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The destination year: 1965

Consumer prices rose 1.6% in 1965, up from 1964’s 1.3% in a pickup that economists later mark as the start of the Great Inflation, a run of accelerating price increases driven by rising Vietnam War spending layered on top of new Great Society programs. The war itself escalated on the ground that March, when about 3,500 Marines came ashore at Da Nang, the first American combat troops committed to Vietnam; troop levels would climb toward 200,000 by year’s end. Domestic policy expanded just as fast: Medicare and Medicaid became law that July 30, creating federal health insurance for older and low-income Americans, and the Voting Rights Act, signed that August 6, banned literacy tests and other devices used to disenfranchise Black voters. The civil rights movement’s gains coexisted with urban unrest that same August, when a highway patrol traffic stop in the Watts neighborhood of Los Angeles set off six days of rioting that left 34 people dead. Consumer prices finished 1965 218.2% above their 1913 level. First-class postage held at 5 cents, and the minimum wage stayed at $1.25 an hour.

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