Value of $100 in 1940, adjusted to 1944

What happened to prices between 1940 and 1944

Between 1940 and 1944, the Consumer Price Index went from 14 to 17.6. Cumulatively, prices increased 25.7%, which works out to an average of 5.89% per year. Put differently, a dollar in 1940 bought what $0.80 buys in 1944.

Consumer prices rose 0.7% in 1940, snapping 1939’s decline and marking the first increase since 1937. The gain was modest, and the CPI still stood 18.1% below its 1929 peak, a reminder of how far the recovery from the Depression’s trough had left to go even as defense orders from Britain and France began reaching American factories. War was already reshaping domestic policy well before it touched American soil. Congress passed the Selective Training and Service Act that September, the country’s first peacetime draft, requiring men aged 21 to 35 to register and authorizing the induction of up to 900,000 men a year, more than a year before Pearl Harbor. That November, Franklin Roosevelt won an unprecedented third term, defeating Republican Wendell Willkie after campaigning on keeping the United States out of the war then consuming Europe and Asia. The promise would not hold much longer: within two years, wartime demand would push consumer prices up faster than at any point since the aftermath of World War I. First-class postage held at 3 cents, and the federal minimum wage stayed at 30 cents an hour, the level set the previous October under the Fair Labor Standards Act.

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The destination year: 1944

Consumer prices rose just 1.7% in 1944, down from 1943’s 6.1% and the slowest increase of the war years, as price and wage controls held the cost of living nearly flat even as the conflict reached its most expensive phase. The war itself turned decisively that June, when more than 150,000 Allied troops landed on the beaches of Normandy, France, opening the long-planned second front against Nazi Germany. Congress used the same month to plan for the war’s end, passing the GI Bill on June 22 to give returning veterans money for college or vocational training, low-cost home and business loans, and unemployment benefits, a package that would reshape American housing and higher education for a generation. The following month, delegates from 44 Allied nations gathered at Bretton Woods, New Hampshire, and agreed to peg their currencies to the U.S. dollar, itself pegged to gold, creating the International Monetary Fund and the World Bank to manage the new system. Consumer prices stood 77.8% above their 1913 level, a cumulative wartime rise held down by controls that would start unwinding the following year. First-class postage held at 3 cents, and the minimum wage stayed at 30 cents an hour.

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