Value of $100 in 1960, adjusted to 2020

What happened to prices between 1960 and 2020

Between 1960 and 2020, the Consumer Price Index went from 29.6 to 258.811. Cumulatively, prices increased 774.4%, which works out to an average of 3.68% per year. Put differently, a dollar in 1960 bought what $0.11 buys in 2020.

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: 2020

2020 was the year the pandemic rewired the price data without triggering the inflation spike that followed it. Consumer prices rose just 1.2% for the year, the mildest pace since 2015, as COVID-19 lockdowns emptied roads, closed airports, and crushed energy demand. Oil told the starkest story: on April 20, U.S. crude futures fell to about negative $37 a barrel, the first negative settlement in the market’s history, as storage capacity ran out and no one wanted the physical barrels. Gasoline followed it down, falling to about $1.80 a gallon nationally that month before recovering to average $2.17 for the year. Grocery prices moved the other way: pantry stocking and meatpacking-plant disruptions pushed food-at-home costs up faster than usual, a rare case of food and energy pulling the index in opposite directions. Washington answered with the $2.2 trillion CARES Act, signed March 27, which sent $1,200 payments to most adults and added $600 a week to unemployment benefits as states ordered widespread business closures. The Federal Reserve cut its policy rate to near zero in two emergency moves that same month and pledged to buy Treasury and mortgage bonds “in the amounts needed” to keep credit markets working, an open-ended commitment beyond even its 2008 response. None of it showed up in the CPI yet: the stimulus, the supply shocks, and the reopening whiplash that followed would build into the fastest inflation in four decades over the next two years.

More about inflation in 2020 →