Value of $100 in 1957, adjusted to 1958

What happened to prices between 1957 and 1958

Between 1957 and 1958, the Consumer Price Index went from 28.1 to 28.9. Cumulatively, prices increased 2.8%, which works out to an average of 2.85% per year. Put differently, a dollar in 1957 bought what $0.97 buys in 1958.

Consumer prices rose 3.3% in 1957, up from 1956’s 1.5% and the sharpest increase since the Korean War price surge of 1951. The jump fed a growing debate among economists over “cost-push” inflation, prices climbing from rising wages and material costs rather than excess demand, a debate that would recur for the next quarter century. The Federal Reserve tightened policy to fight it, and by August the tighter money combined with falling business investment to tip the economy into a recession, according to the National Bureau of Economic Research’s dating. The Cold War took a technological turn that October, when the Soviet Union launched Sputnik, the first artificial satellite, on the 4th, stunning the American public and setting off both the Space Race and a surge in federal science and defense spending the following year. Civil rights reached a crisis that September in Little Rock, Arkansas: after Governor Orval Faubus used the National Guard to block nine Black students from Central High School, Eisenhower federalized the Guard and sent the 101st Airborne Division to enforce the Supreme Court’s desegregation order. Consumer prices finished 1957 183.8% above their 1913 level. First-class postage held at 3 cents, and the minimum wage stood at $1.00 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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