Between 1949 and 1990, the Consumer Price Index went from 23.8 to 130.7.
Cumulatively, prices increased 449.2%, which works out to an average of
4.24% per year. Put differently, a dollar in 1949 bought what
$0.18 buys in 1990.
Consumer prices fell 1.2% in 1949, down from 1948’s 8.1%
gain and the first annual decline since 1939, the first real break in a
decade otherwise defined by wartime and postwar inflation. A mild recession
drove the drop: the National Bureau of Economic Research dates a downturn
from November 1948 to October 1949, as businesses worked off inventories
built up during the postwar buying boom and price pressure finally eased.
The Cold War hardened around the same time. On April 4, the United States,
Canada, and ten Western European nations signed the North Atlantic Treaty,
committing to treat an attack on one member as an attack on all and
formalizing the Western alliance against Soviet expansion. That August 29,
the Soviet Union tested its first atomic bomb, ending the American nuclear
monopoly just four years after Hiroshima and Nagasaki and setting off an
arms race that would run for decades. Congress closed out the decade’s wage
policy that October, passing the Fair Labor Standards Amendments of 1949 to
raise the federal minimum wage to 75 cents an hour effective the following
January, nearly double the 40 cents that had held since 1945. The decade
closed with consumer prices 140.4% above their 1913 level,
up 70% since 1940 alone even after 1949’s decline.
First-class postage held at 3 cents.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1949 spending costs in 1990, by category:
Category
Avg. yearly inflation
$100 in 1949 →
All items (CPI-U)
4.24%
$549
Medical care
6.02%
$1,100
Transportation
4.22%
$545
Food
4.15%
$530
Apparel
2.75%
$304
Not shown because the BLS began these indexes after 1949: core (all items less food & energy) (1957–), energy (1957–), housing (1967–), recreation (1993–), education & communication (1993–).
Long periods are sampled every 2 years; the calculator above covers any pair of years.
The destination year: 1990
In 1990, the median U.S. household earned about $29,900, gas averaged $1.15 a
gallon, and mailing a letter cost a quarter. Inflation ran hot at 5.4% for the
year, its highest rate since 1982, pushed up by an oil shock after Iraq’s
invasion of Kuwait, and the economy tipped into recession that summer. It was
the last gasp of elevated inflation before the long calm of the 1990s.
MLA: “Inflation from 1949 to 1990: $100 is worth $549 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1949-to-1990/
APA: InflationCalculator.com. Inflation from 1949 to 1990. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1949-to-1990/