Value of $100 in 1963, adjusted to 1975

What happened to prices between 1963 and 1975

Between 1963 and 1975, the Consumer Price Index went from 30.6 to 53.8. Cumulatively, prices increased 75.8%, which works out to an average of 4.81% per year. Put differently, a dollar in 1963 bought what $0.57 buys in 1975.

Consumer prices rose 1.3% in 1963, up slightly from 1962’s 1.0% as the expansion entered its third year with inflation still low, conditions that gave Kennedy room to push the large tax cut he had proposed to Congress. The cost of a first-class stamp rose that January 7, to 5 cents from 4 cents, the first postal rate change since 1958. That August 28, Martin Luther King Jr. delivered his “I Have a Dream” speech from the steps of the Lincoln Memorial to a quarter million people gathered for the March on Washington, building pressure on Congress to pass the civil rights bill Kennedy had proposed that June. The year ended in tragedy: Kennedy was assassinated while riding in a motorcade through Dallas on November 22, and Lyndon B. Johnson was sworn in aboard Air Force One that same afternoon. Johnson would spend the following year pushing Kennedy’s stalled tax and civil rights agenda through Congress. The minimum wage rose again that September, to $1.25 an hour, the second step of the phased increase set two years earlier. Consumer prices finished 1963 209.1% above their 1913 level.

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The destination year: 1975

Consumer prices rose 9.1% in 1975, easing slightly from 1974’s 11.0% but still running far above anything the country had experienced before the decade began. The recession that started in November 1973, the deepest since the Great Depression, bottomed out that March, yet unemployment kept climbing through the year and touched 9%, a combination of high inflation and high joblessness that had no precedent in the postwar data. Vietnam ended that April 30, when North Vietnamese forces captured Saigon and the last Americans were evacuated by helicopter from the U.S. embassy roof. Fiscal strain hit closer to home too: New York City, facing bankruptcy after years of borrowing to paper over budget gaps, asked Washington for help that October. President Ford’s initial refusal produced the Daily News headline “Ford to City: Drop Dead,” though he ultimately signed a federal loan package that December. Amid the gloom, Bill Gates and Paul Allen founded Microsoft that April in Albuquerque, New Mexico, to sell a version of the BASIC programming language for the Altair 8800, one of the first personal computers sold to hobbyists. A median household earned $11,800 in 1975, a new home sold for a median $39,300, and first-class postage held at 10 cents, unchanged since 1974’s increase. Consumer prices stood 443.4% above their 1913 level, with the decade barely past its midpoint.

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