Value of $100 in 1964, adjusted to 1979

What happened to prices between 1964 and 1979

Between 1964 and 1979, the Consumer Price Index went from 31 to 72.6. Cumulatively, prices increased 134.2%, which works out to an average of 5.84% per year. Put differently, a dollar in 1964 bought what $0.43 buys in 1979.

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: 1979

Consumer prices rose 11.3% in 1979, the fastest pace since 1947 and the decade’s second bout of double-digit inflation after 1974’s 11.0%. The trigger was familiar: the Iranian Revolution that January halted Iran’s oil exports, and panic buying amplified the shortage, sending crude prices sharply higher over the year and motorists back into gas lines, with some states reviving the odd-even rationing last seen in 1974. Paul Volcker, appointed Federal Reserve chairman that August, responded with a strategy shift announced that October: the Fed would target the money supply directly and let interest rates rise as high as necessary to break inflation, whatever the short-term cost. That cost would arrive as a deep recession in 1981-82, but by year’s end 1979 had already delivered enough turmoil on its own. A reactor at the Three Mile Island plant near Harrisburg, Pennsylvania, suffered a partial core meltdown that March 28, the worst commercial nuclear accident in U.S. history, and on November 4, militants in Tehran stormed the U.S. embassy and took 52 Americans hostage, beginning a 444-day crisis that consumed the rest of Carter’s presidency. A median household earned $16,461 in 1979, a new home sold for a median $62,900, and gas jumped to 86 cents a gallon. Consumer prices finished the decade 97.8% above where they stood in 1969, very nearly doubling in ten years, and stood 633.3% above their 1913 level. The 1970s had opened with inflation cooling from the 1969 spike and closed with prices rising faster than at any point since 1947, setting up the Great Inflation’s final act in 1980.

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