Value of $100 in 1953, adjusted to 1958

What happened to prices between 1953 and 1958

Between 1953 and 1958, the Consumer Price Index went from 26.7 to 28.9. Cumulatively, prices increased 8.2%, which works out to an average of 1.60% per year. Put differently, a dollar in 1953 bought what $0.92 buys in 1958.

Consumer prices rose 0.8% in 1953, down from 1952’s 1.9% as fighting in Korea wound toward a truce and three years of wartime buying pressure finally eased. The year’s biggest shock came from Moscow: Soviet leader Joseph Stalin died March 5 after nearly three decades in power, the first change of Soviet leadership since the 1920s, opening a period of uncertainty over how his successors would deal with the West. Washington used the calmer backdrop to unwind its own wartime machinery. Authority for the price and wage controls imposed in 1951 lapsed that spring, as the Eisenhower administration, which favored free markets over controls, wound down the Office of Price Stabilization. The war itself ended, on paper, that July: negotiators signed an armistice July 27 at Panmunjom, halting the fighting roughly along the original border near the 38th parallel. No formal peace treaty ever followed, and North and South Korea remain technically at war. Consumer prices finished 1953 169.7% above their 1913 level. First-class postage held at 3 cents, and the minimum wage stayed at 75 cents an hour.

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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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