Between 1951 and 1961, the Consumer Price Index went from 26 to 29.9.
Cumulatively, prices increased 15.0%, which works out to an average of
1.41% per year. Put differently, a dollar in 1951 bought what
$0.87 buys in 1961.
Consumer prices rose 7.9% in 1951, up sharply from 1950’s
1.3% and the fastest increase since 1947, as Korean War buying and a
defense spending surge hit an economy still adjusting to peacetime. Much
of the jump came early in the year, before the government stepped in: the
Office of Price Stabilization imposed a general ceiling on prices January
26, and the Wage Stabilization Board froze wages soon after, the broadest
peacetime controls since the war began that June. The year’s more lasting
change came in monetary policy. On March 4, the Treasury and the Federal
Reserve signed the Accord, ending the Fed’s wartime obligation to hold
down interest rates on government bonds and freeing the central bank to
fight inflation on its own terms for the first time since 1942, a shift
that would shape Fed independence for decades. Congress raised taxes that
October to help pay for the war: the Revenue Act of 1951, signed October
20, lifted individual and corporate income taxes along with a range of
excise taxes, the third increase in taxes since fighting began in Korea.
Consumer prices finished 1951 162.6% above their 1913
level. First-class postage held at 3 cents, and the minimum wage stayed at
75 cents an hour.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1951 spending costs in 1961, by category:
Category
Avg. yearly inflation
$100 in 1951 →
All items (CPI-U)
1.41%
$115
Medical care
3.72%
$144
Transportation
2.25%
$125
Food
0.75%
$108
Apparel
0.49%
$105
Not shown because the BLS began these indexes after 1951: core (all items less food & energy) (1957–), energy (1957–), housing (1967–), recreation (1993–), education & communication (1993–).
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.
MLA: “Inflation from 1951 to 1961: $100 is worth $115 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1951-to-1961/
APA: InflationCalculator.com. Inflation from 1951 to 1961. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1951-to-1961/