Value of $100 in 1943, adjusted to 1961

What happened to prices between 1943 and 1961

Between 1943 and 1961, the Consumer Price Index went from 17.3 to 29.9. Cumulatively, prices increased 72.8%, which works out to an average of 3.09% per year. Put differently, a dollar in 1943 bought what $0.58 buys in 1961.

Consumer prices rose 6.1% in 1943, a slower pace than 1942’s surge but still well above anything the country had seen before the war. The slowdown owed largely to the “Hold the Line” order, issued that April, which froze most wages, prices, and rents at their current levels after the previous year’s jump showed how far demand had outrun the existing controls. Rationing grew more sophisticated alongside the freeze: starting in February, a points system split scarce goods into red points for meat, butter, and other fats and blue points for canned and processed foods, letting households budget across categories instead of simply going without once a flat quota ran dry. The government also changed how it collected the taxes paying for all of it. The Current Tax Payment Act, signed June 9, required employers to withhold federal income tax directly from paychecks for the first time, smoothing the flow of wartime revenue and creating the pay-as-you-go system still used today. Consumer prices stood 74.7% above their 1913 level and 33.1% above 1933’s Depression-era low. First-class postage held at 3 cents, and the minimum wage stayed at 30 cents an hour.

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The destination year: 1961

Consumer prices rose 1.0% in 1961, down from 1960’s 1.7% as the economy climbed out of recession, a recovery the National Bureau of Economic Research dates to that February. Politically, the year opened with a changing of the guard: outgoing president Dwight Eisenhower’s farewell address on January 17 warned of a growing “military-industrial complex,” and three days later John F. Kennedy was sworn in, urging Americans to “ask not what your country can do for you.” The new administration’s first major foreign-policy test came quickly and badly: a CIA-organized force of Cuban exiles landed at the Bay of Pigs on April 17 aiming to topple Fidel Castro, and without the U.S. air support Kennedy withheld, the invasion collapsed within three days. Cold War tensions hardened further that August, when East German forces sealed the border between East and West Berlin overnight, building what would become the Berlin Wall and stopping the flow of refugees to the West. Domestically, the wage floor moved for the first time in five years: the Fair Labor Standards Amendments of 1961, effective that September, raised the minimum wage to $1.15 an hour and extended coverage to roughly 3.6 million additional workers. Consumer prices finished 1961 202.0% above their 1913 level. First-class postage held at 4 cents.

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