Value of $100 in 1938, adjusted to 1952

What happened to prices between 1938 and 1952

Between 1938 and 1952, the Consumer Price Index went from 14.1 to 26.5. Cumulatively, prices increased 87.9%, which works out to an average of 4.61% per year. Put differently, a dollar in 1938 bought what $0.53 buys in 1952.

Consumer prices fell 2.1% in 1938, reversing most of 1937’s gain and interrupting four straight years of recovery from the Depression’s trough. The National Bureau of Economic Research dates the bottom of the downturn, which had begun that May, to June 1938, a sharp 13-month contraction that briefly pushed unemployment back up near 19%. Even in a year the economy was shrinking again, Congress passed one of the New Deal’s most lasting reforms. The Fair Labor Standards Act, signed June 25 and effective that October, established the first federal minimum wage, 25 cents an hour, capped the standard workweek at 44 hours with time-and-a-half overtime beyond it, and restricted the employment of children in most industries. The wage floor and hours limits applied only to workers engaged in interstate commerce at first, but they set a precedent that would expand in the decades that followed. Consumer prices stood 42.4% above their 1913 level and 17.5% below their 1929 peak, evidence of how far the recovery still had to go even eight years after the Depression began. First-class postage held at 3 cents.

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The destination year: 1952

Consumer prices rose 1.9% in 1952, down sharply from 1951’s 7.9% as the price and wage controls imposed the year before held the cost of living in check even with the Korean War still underway. Labor strife tested those controls that spring: to head off a strike that could have disrupted war production, President Truman ordered the government to seize the steel industry that April, over the objections of steel companies fighting the price the Office of Price Stabilization had set for their product. The Supreme Court ruled the seizure unconstitutional in Youngstown Sheet & Tube Co. v. Sawyer that June, a landmark limit on presidential power, and steelworkers then struck for 53 days before a settlement. Politics delivered the year’s biggest change that November: Dwight Eisenhower defeated Adlai Stevenson, promising to “go to Korea” to end the war and returning Republicans to the White House for the first time since 1933. The Cold War’s technological edge sharpened that same month, when the United States tested the first hydrogen bomb at Enewetak Atoll on November 1, a device hundreds of times more powerful than the atomic bombs used against Japan in 1945. Consumer prices finished 1952 167.7% above their 1913 level. First-class postage held at 3 cents, and the minimum wage stayed at 75 cents an hour.

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