Value of $100 in 1959, adjusted to 1980

What happened to prices between 1959 and 1980

Between 1959 and 1980, the Consumer Price Index went from 29.1 to 82.4. Cumulatively, prices increased 183.2%, which works out to an average of 5.08% per year. Put differently, a dollar in 1959 bought what $0.35 buys in 1980.

Consumer prices rose 0.7% in 1959, down sharply from 1958’s 2.8% as the economy recovered briskly from the year before’s recession, with output and employment both rebounding through the year. The map of the country changed that year for the first time since 1912: Alaska joined the union January 3, and Hawaii followed August 21, completing the 50-state United States. Ninety miles from Florida, Cuba changed hands that January, when Fidel Castro’s guerrilla forces overthrew President Fulgencio Batista, who fled the country on the 1st; Castro entered Havana on the 8th, beginning a Communist government that would define Cold War tensions in the hemisphere for decades. Labor and management fought their longest battle of the postwar era that summer: the United Steelworkers walked out July 15 in a dispute over work rules, the longest strike in the industry’s history, before a federal court granted the Eisenhower administration a Taft-Hartley back-to-work order that November. Consumer prices finished the decade 193.9% above their 1913 level, up 20.7% from where they stood in 1950. First-class postage held at 4 cents, and the minimum wage stayed at $1.00 an hour.

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The destination year: 1980

1980 sat at the very peak of the Great Inflation. Prices rose 13.5% in that single year, mortgage rates were climbing toward 16%, and the Federal Reserve under Paul Volcker was administering the painful interest-rate medicine that would finally break the inflationary spiral, at the cost of the deep 1981–82 recession. No single year looms larger in how Americans think about inflation.

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