Value of $100 in 1954, adjusted to 1970

What happened to prices between 1954 and 1970

Between 1954 and 1970, the Consumer Price Index went from 26.9 to 38.8. Cumulatively, prices increased 44.2%, which works out to an average of 2.32% per year. Put differently, a dollar in 1954 bought what $0.69 buys in 1970.

Consumer prices rose 0.7% in 1954, extending 1953’s 0.8% slowdown even as the economy tipped into recession, an early example of prices continuing to rise through a downturn rather than falling with it. The National Bureau of Economic Research dates that recession from July 1953 to May 1954, as defense spending fell after the Korean War armistice and the tighter monetary policy of the year before worked its way through the economy. The Supreme Court reshaped a different part of American life that spring: its unanimous May 17 ruling in Brown v. Board of Education held that “separate but equal” public schools violated the Constitution, overturning the legal basis for segregated education. Washington also closed the book on a different fight that year. Following the televised Army-McCarthy hearings that spring, the Senate voted 67 to 22 on December 2 to condemn Senator Joseph McCarthy’s conduct, ending his dominance of American politics after four years of anti-communist investigations. Consumer prices finished 1954 171.7% above their 1913 level, essentially flat with 1953 as the mild recession held the cost of living in check. First-class postage held at 3 cents, and the minimum wage stayed at 75 cents an hour.

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The destination year: 1970

Consumer prices rose 5.7% in 1970, up from 1969’s 5.5%, extending a run of faster price growth that stretched back to the mid-1960s, even as a recession that began in December 1969 pushed unemployment toward 6%. Prices and joblessness rising together confounded the era’s economic thinking, which held that policymakers could trade a little more inflation for a little less unemployment; 1970 was an early sign that trade-off was breaking down, a pattern that would harden into stagflation later in the decade. Washington restructured how it delivered mail that year: after postal workers staged the first strike ever by federal employees that March, Congress passed the Postal Reorganization Act in August, replacing the cabinet-level Post Office Department with the independent U.S. Postal Service. Environmental policy also took shape in 1970. An estimated 20 million Americans marked the first Earth Day on April 22, and the Environmental Protection Agency opened that December to enforce the Clean Air Act and the pollution rules that followed. The Vietnam War kept dividing the country: on May 4, National Guard troops fired on antiwar demonstrators at Kent State University in Ohio, killing four students and setting off strikes on hundreds of campuses. A median household earned $8,734 that year, a gallon of gas averaged 36 cents, and a first-class stamp cost 6 cents, the rate it had held since 1968. Prices stood 291.9% above their 1913 level by the end of 1970, a milestone that would look almost mild against the decade still to come.

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