Value of $100 in 1958, adjusted to 1962

What happened to prices between 1958 and 1962

Between 1958 and 1962, the Consumer Price Index went from 28.9 to 30.2. Cumulatively, prices increased 4.5%, which works out to an average of 1.11% per year. Put differently, a dollar in 1958 bought what $0.96 buys in 1962.

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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The destination year: 1962

Consumer prices rose 1.0% in 1962, matching 1961’s pace as inflation stayed remarkably low and unemployment slowly declined from its recession-era highs. That January, Kennedy’s Council of Economic Advisers introduced “wage-price guideposts,” non-binding targets meant to keep pay and price increases in line with productivity growth without formal controls. The space race delivered a milestone that February, when John Glenn’s Friendship 7 capsule circled Earth three times, making him the first American to orbit the planet. Markets got a scare that spring: a dispute over U.S. Steel’s April price increase, which Kennedy publicly pressured the company into rolling back, rattled investors, and the Dow Jones Industrial Average fell about 5.7% on May 28, its steepest one-day drop since the 1929 crash. The year’s gravest moment came that October, when American reconnaissance photographed Soviet nuclear missiles in Cuba, setting off a 13-day standoff that brought the two superpowers closer to nuclear war than at any other point in the Cold War before the Soviet Union agreed to remove the missiles in exchange for a U.S. pledge not to invade the island. Consumer prices finished 1962 205.1% above their 1913 level. First-class postage held at 4 cents, and the minimum wage stayed at $1.15 an hour.

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