Value of $100 in 1950, adjusted to 1959

What happened to prices between 1950 and 1959

Between 1950 and 1959, the Consumer Price Index went from 24.1 to 29.1. Cumulatively, prices increased 20.7%, which works out to an average of 2.12% per year. Put differently, a dollar in 1950 bought what $0.83 buys in 1959.

Consumer prices rose 1.3% in 1950, up from 1949’s 1.2% decline, a mild gain that hid a sharp turn partway through the year. The cost of living had been roughly flat through the spring, then jumped after North Korea invaded South Korea on June 25, setting off a wave of hoarding and defense buying reminiscent of World War II shortages. The United States entered the war within days under a United Nations mandate; American and South Korean forces were pushed back to the Pusan Perimeter that summer before a landing at Inchon that September reversed the front, and China’s entry into the war that November turned it into a longer stalemate. Congress moved to put the economy on a war footing that September, passing the Defense Production Act, which gave the president authority to direct industrial output toward the military and, if prices kept climbing, to impose formal wage and price controls. Domestic policy also expanded that year: the Social Security Amendments of 1950, signed August 28, raised benefits across the board and extended coverage to roughly 10 million more workers, the program’s first major expansion since it began in 1935. Consumer prices finished 1950 143.4% above their 1913 level, matching 1948’s postwar high after 1949’s brief decline. First-class postage held at 3 cents, and the minimum wage stood at 75 cents an hour after January’s increase.

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The destination year: 1959

Consumer prices rose 0.7% in 1959, down sharply from 1958’s 2.8% as the economy recovered briskly from the year before’s recession, with output and employment both rebounding through the year. The map of the country changed that year for the first time since 1912: Alaska joined the union January 3, and Hawaii followed August 21, completing the 50-state United States. Ninety miles from Florida, Cuba changed hands that January, when Fidel Castro’s guerrilla forces overthrew President Fulgencio Batista, who fled the country on the 1st; Castro entered Havana on the 8th, beginning a Communist government that would define Cold War tensions in the hemisphere for decades. Labor and management fought their longest battle of the postwar era that summer: the United Steelworkers walked out July 15 in a dispute over work rules, the longest strike in the industry’s history, before a federal court granted the Eisenhower administration a Taft-Hartley back-to-work order that November. Consumer prices finished the decade 193.9% above their 1913 level, up 20.7% from where they stood in 1950. First-class postage held at 4 cents, and the minimum wage stayed at $1.00 an hour.

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