Value of $100 in 1944, adjusted to 1948

What happened to prices between 1944 and 1948

Between 1944 and 1948, the Consumer Price Index went from 17.6 to 24.1. Cumulatively, prices increased 36.9%, which works out to an average of 8.17% per year. Put differently, a dollar in 1944 bought what $0.73 buys in 1948.

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.

More about inflation in 1944 →

The destination year: 1948

Consumer prices rose 8.1% in 1948, down slightly from 1947’s 14.4% but still the second straight year of sharp postwar inflation now that wartime price controls were fully gone. Congress moved to stabilize a different economy that April, passing the Economic Cooperation Act to fund the plan Secretary of State George Marshall had proposed the year before: more than $13 billion over four years to rebuild Western Europe and counter Soviet influence. The Cold War turned tense closer to the plan’s target that June, when Soviet forces cut off road and rail access to the Western-controlled sectors of Berlin. American and British aircraft responded almost immediately with an airlift of food, fuel, and supplies that would keep the city running for nearly a year. Domestic politics produced its own upset that November: nearly every poll and pundit had predicted a Republican win, but Harry Truman defeated New York Governor Thomas Dewey, handing the Chicago Tribune its famously wrong “Dewey Defeats Truman” headline. Consumer prices finished the year 143.4% above their 1913 level and 40.9% above 1929’s pre-Depression peak. First-class postage held at 3 cents, and the minimum wage stayed at 40 cents an hour.

More about inflation in 1948 →