Value of $100 in 1945, adjusted to 1958

What happened to prices between 1945 and 1958

Between 1945 and 1958, the Consumer Price Index went from 18 to 28.9. Cumulatively, prices increased 60.6%, which works out to an average of 3.71% per year. Put differently, a dollar in 1945 bought what $0.62 buys in 1958.

Consumer prices rose 2.3% in 1945, up from 1944’s 1.7% but still modest, a rate that understated how much pressure had built up behind wartime price and wage controls, which stayed largely in place even as the conflict that justified them came to a close. The year opened with a shock at home: Franklin Roosevelt died of a cerebral hemorrhage on April 12, less than three months into an unprecedented fourth term, and Vice President Harry Truman was sworn in that same afternoon. The war Roosevelt had led for nearly four years ended without him. Germany surrendered on May 8, and Japan surrendered on August 15, after atomic bombs fell on Hiroshima and Nagasaki that month, with the formal signing aboard the USS Missouri on September 2. Domestic policy kept moving even as the guns fell silent: the federal minimum wage rose to 40 cents an hour that October 24, the final step of the schedule Congress had built into the 1938 Fair Labor Standards Act, up from 30 cents in 1939 and 25 cents at the law’s start. Consumer prices stood 81.8% above their 1913 level, a gain that would look modest next to what followed once wartime controls actually came off. First-class postage held at 3 cents.

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The destination year: 1958

Consumer prices rose 2.8% in 1958, down only slightly from 1957’s 3.3% even as the country sank into the sharpest postwar recession to that point, an early sign that inflation and a shrinking economy could coexist rather than trade off against each other. The National Bureau of Economic Research dates the downturn’s trough to that April, with unemployment peaking near 7.5% that summer, the worst reading since the 1930s. The Post Office raised first-class postage to 4 cents that August 1, up from 3 cents, the rate’s first change since 1932. Washington answered the Soviet Union’s technological lead that summer too: Eisenhower signed the National Aeronautics and Space Act on July 29, establishing NASA, which opened for business that October 1 to compete with the Soviet space program after the shock of Sputnik the year before. Consumer prices finished 1958 191.9% above their 1913 level. The minimum wage held at $1.00 an hour, and first-class postage rose to 4 cents that August, the first increase since 1932.

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