Value of $100 in 1956, adjusted to 1963

What happened to prices between 1956 and 1963

Between 1956 and 1963, the Consumer Price Index went from 27.2 to 30.6. Cumulatively, prices increased 12.5%, which works out to an average of 1.70% per year. Put differently, a dollar in 1956 bought what $0.89 buys in 1963.

Consumer prices rose 1.5% in 1956, a return to mild inflation after they had fallen 0.4% in 1955, the only annual decline of the decade. The two years sat in the calmest stretch of the postwar index, a lull between the Korean War price surge earlier in the 1950s and the acceleration that would return in the 1970s. Congress had already raised the wage floor into that calm: the Fair Labor Standards Amendments of 1955, signed the previous August, took effect March 1 and lifted the federal minimum wage from 75 cents to $1 an hour, the first increase since 1950. Eisenhower signed a longer-lasting commitment on June 29, the Federal-Aid Highway Act, funding 41,000 miles of controlled-access highway at 90% federal cost to build the Interstate System, the largest public-works program the country had undertaken. He won a second term that November, carrying 41 states and about 57% of the popular vote in a rematch against Adlai Stevenson. Abroad, the Suez Crisis broke the calm on the supply side: Egypt nationalized the canal on July 26, and after Israel invaded the Sinai on October 29 with British and French forces following, the canal’s closure and damaged pipelines squeezed oil shipments to Western Europe for months. Consumer prices stood 174.7% above their 1913 level by 1956, up 94% since 1940 alone, even after a decade that had barely moved the index. First-class postage held at 3 cents, unchanged since 1932.

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The destination year: 1963

Consumer prices rose 1.3% in 1963, up slightly from 1962’s 1.0% as the expansion entered its third year with inflation still low, conditions that gave Kennedy room to push the large tax cut he had proposed to Congress. The cost of a first-class stamp rose that January 7, to 5 cents from 4 cents, the first postal rate change since 1958. That August 28, Martin Luther King Jr. delivered his “I Have a Dream” speech from the steps of the Lincoln Memorial to a quarter million people gathered for the March on Washington, building pressure on Congress to pass the civil rights bill Kennedy had proposed that June. The year ended in tragedy: Kennedy was assassinated while riding in a motorcade through Dallas on November 22, and Lyndon B. Johnson was sworn in aboard Air Force One that same afternoon. Johnson would spend the following year pushing Kennedy’s stalled tax and civil rights agenda through Congress. The minimum wage rose again that September, to $1.25 an hour, the second step of the phased increase set two years earlier. Consumer prices finished 1963 209.1% above their 1913 level.

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