Between 1961 and 2020, the Consumer Price Index went from 29.9 to 258.811.
Cumulatively, prices increased 765.6%, which works out to an average of
3.73% per year. Put differently, a dollar in 1961 bought what
$0.12 buys in 2020.
Consumer prices rose 1.0% in 1961, down from 1960’s 1.7% as
the economy climbed out of recession, a recovery the National Bureau of
Economic Research dates to that February. Politically, the year opened
with a changing of the guard: outgoing president Dwight Eisenhower’s
farewell address on January 17 warned of a growing “military-industrial
complex,” and three days later John F. Kennedy was sworn in, urging
Americans to “ask not what your country can do for you.” The new
administration’s first major foreign-policy test came quickly and badly:
a CIA-organized force of Cuban exiles landed at the Bay of Pigs on April
17 aiming to topple Fidel Castro, and without the U.S. air support Kennedy
withheld, the invasion collapsed within three days. Cold War tensions
hardened further that August, when East German forces sealed the border
between East and West Berlin overnight, building what would become the
Berlin Wall and stopping the flow of refugees to the West. Domestically,
the wage floor moved for the first time in five years: the Fair Labor
Standards Amendments of 1961, effective that September, raised the
minimum wage to $1.15 an hour and extended coverage to roughly 3.6 million
additional workers. Consumer prices finished 1961 202.0% above their
1913 level. First-class postage held at 4 cents.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1961 spending costs in 2020, by category:
Category
Avg. yearly inflation
$100 in 1961 →
All items (CPI-U)
3.73%
$866
Medical care
5.43%
$2,266
Food
3.75%
$879
Energy
3.75%
$875
Core (all items less food & energy)
3.72%
$864
Transportation
3.27%
$669
Apparel
1.61%
$256
Not shown because the BLS began these indexes after 1961: housing (1967–), recreation (1993–), education & communication (1993–).
Long periods are sampled every 2 years; the calculator above covers any pair of years.
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.
MLA: “Inflation from 1961 to 2020: $100 is worth $866 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1961-to-2020/
APA: InflationCalculator.com. Inflation from 1961 to 2020. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1961-to-2020/