Value of $100 in 1960, adjusted to 1978

What happened to prices between 1960 and 1978

Between 1960 and 1978, the Consumer Price Index went from 29.6 to 65.2. Cumulatively, prices increased 120.3%, which works out to an average of 4.48% per year. Put differently, a dollar in 1960 bought what $0.45 buys in 1978.

Consumer prices rose 1.7% in 1960, up from 1959’s 0.7% even as the economy slipped into recession that April, a downturn that would prove the shortest since World War II. The year’s defining political moment came that November, when John F. Kennedy narrowly defeated Richard Nixon in one of the closest presidential elections in U.S. history, decided by roughly two-tenths of a percentage point in the popular vote. Television played a new role in the race: the first-ever televised presidential debate that September, watched by an estimated 70 million people, was widely seen as favoring the telegenic Kennedy. Civil rights protest took a new form that February, when four Black freshmen at North Carolina A&T State University sat down at a whites-only Woolworth’s lunch counter in Greensboro and refused to leave; the sit-in tactic spread to dozens of Southern cities within weeks. Cold War tensions flared that May, when a Soviet missile downed an American U-2 spy plane deep inside Soviet airspace. The pilot, Francis Gary Powers, was captured alive, embarrassing the Eisenhower administration and collapsing a Paris summit called to ease relations with Moscow. Consumer prices finished 1960 199.0% above their 1913 level. First-class postage held at 4 cents, and the minimum wage stayed at $1.00 an hour.

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The destination year: 1978

Consumer prices rose 7.6% in 1978, accelerating for a second straight year as rising wages, a weakening dollar, and climbing energy costs outpaced the Federal Reserve’s response. Fed chairman G. William Miller, appointed by Carter that March, kept interest rates too low to slow the trend, a policy later cited as one reason inflation kept building toward the following year’s crisis. California voters responded to their own version of the problem that June, passing Proposition 13 by nearly two to one to cap property tax rates after years of rising home values had pushed tax bills up alongside them. Foreign policy delivered one of the decade’s genuine breakthroughs: President Carter brought Egyptian President Anwar Sadat and Israeli Prime Minister Menachem Begin together for thirteen days of negotiations at Camp David that September, producing a framework for peace between the two countries that was signed as a treaty the following March. First-class postage rose to 15 cents that May 29, a rate that would hold longer than any other in the decade. The year ended in tragedy: cult leader Jim Jones directed the mass murder-suicide of more than 900 followers at a remote settlement in Guyana that November 18. A median household earned $15,064 in 1978, a new home sold for a median $55,700, and gas averaged 63 cents a gallon. Consumer prices stood 558.6% above their 1913 level, with the decade’s worst inflation still to come.

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