Value of $100 in 1964, adjusted to 1968

What happened to prices between 1964 and 1968

Between 1964 and 1968, the Consumer Price Index went from 31 to 34.8. Cumulatively, prices increased 12.3%, which works out to an average of 2.93% per year. Put differently, a dollar in 1964 bought what $0.89 buys in 1968.

Consumer prices rose 1.3% in 1964, matching 1963’s pace even as a large federal tax cut took effect that year. The Revenue Act of 1964, signed February 26, lowered individual and corporate tax rates significantly, the cut Kennedy had proposed the year before his death and Johnson pushed through Congress as a Keynesian bet that lower taxes would spur enough growth without stoking prices. Congress reshaped civil rights law that July 2, when the Civil Rights Act of 1964 outlawed discrimination based on race, color, religion, sex, and national origin in employment and public accommodations, the most sweeping civil rights legislation since Reconstruction. Vietnam policy shifted that August, when Congress passed the Gulf of Tonkin Resolution after reported attacks on U.S. Navy destroyers, authorizing Johnson to use military force in Vietnam without a formal declaration of war. American pop culture changed that February too: the Beatles landed at New York’s Kennedy Airport and played the Ed Sullivan Show two days later for an estimated 73 million viewers, igniting the “British Invasion.” Consumer prices finished 1964 213.1% above their 1913 level. First-class postage held at 5 cents, and the minimum wage stayed at $1.25 an hour.

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The destination year: 1968

Consumer prices rose 4.2% in 1968, up sharply from 1967’s 3.1% and the fastest pace in 17 years, as Vietnam War spending and a tight labor market pushed inflation higher despite the Federal Reserve’s earlier tightening. The year was marked by political violence: Martin Luther King Jr. was assassinated on a motel balcony in Memphis on April 4, touching off rioting in more than 100 cities, and Robert F. Kennedy was shot in Los Angeles on June 5, moments after winning California’s Democratic presidential primary, and died the next day. Washington tried to answer the inflation problem directly that June 28, when Congress passed a 10% income tax surcharge, the Revenue and Expenditure Control Act, temporarily raising taxes and cutting spending to cool an economy overheated by war and Great Society outlays; prices kept accelerating anyway. The cost of living rose in smaller, more visible ways too: first-class postage climbed to 6 cents that January 7, and the minimum wage rose to $1.60 an hour that February 1, the final step of the increase Congress had set two years earlier. Consumer prices finished 1968 251.5% above their 1913 level.

More about inflation in 1968 →