Between 1966 and 2020, the Consumer Price Index went from 32.4 to 258.811.
Cumulatively, prices increased 698.8%, which works out to an average of
3.92% per year. Put differently, a dollar in 1966 bought what
$0.13 buys in 2020.
Consumer prices rose 2.9% in 1966, nearly double 1965’s
1.6% as Vietnam War spending kept climbing without an offsetting tax
increase, pushing the economy closer to capacity and prices higher along
with it. Medicare coverage took effect that July 1, extending federal
health insurance to roughly 19 million Americans age 65 and older under
the program signed into law the year before. The Federal Reserve had
already moved to cool the overheating economy, raising its discount rate
the previous December over White House objections; the tightening carried
into 1966 as the first postwar credit crunch, freezing parts of the
housing and municipal bond markets even as inflation kept climbing. Congress widened
the wage floor’s reach that September 23, when the Fair Labor Standards
Amendments of 1966 set a $1.40 minimum wage effective the following
February and extended coverage to roughly 9 million more workers in
retail, hospitals, schools, and other services not previously covered.
Consumer prices finished 1966 227.3% above their 1913
level. First-class postage held at 5 cents, and the minimum wage stayed at
$1.25 an hour for the rest of the year.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1966 spending costs in 2020, by category:
Category
Avg. yearly inflation
$100 in 1966 →
All items (CPI-U)
3.92%
$799
Medical care
5.68%
$1,973
Energy
4.03%
$845
Core (all items less food & energy)
3.92%
$799
Food
3.90%
$791
Transportation
3.45%
$623
Apparel
1.64%
$241
Not shown because the BLS began these indexes after 1966: 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 1966 to 2020: $100 is worth $799 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1966-to-2020/
APA: InflationCalculator.com. Inflation from 1966 to 2020. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1966-to-2020/