Value of $100 in 1967, adjusted to 1974

What happened to prices between 1967 and 1974

Between 1967 and 1974, the Consumer Price Index went from 33.4 to 49.3. Cumulatively, prices increased 47.6%, which works out to an average of 5.72% per year. Put differently, a dollar in 1967 bought what $0.68 buys in 1974.

Consumer prices rose 3.1% in 1967, up from 1966’s 2.9% as Vietnam War spending kept climbing alongside expanding Great Society programs, a combination of rising military and domestic outlays that economists later blamed for entrenching inflation through the rest of the decade. The minimum wage rose that February 1, to $1.40 an hour, the first step of a phased increase Congress had set the year before. Urban unrest reached a peak that July, when days of rioting left 26 dead in Newark and 43 dead in Detroit, the deadliest of that summer’s roughly 160 disturbances; Johnson responded by forming the Kerner Commission to study the causes of the unrest. The Supreme Court gained its first Black justice that year too: the Senate confirmed Thurgood Marshall on August 30, and he was sworn in that October after serving as U.S. Solicitor General and, before that, as the lead attorney in Brown v. Board of Education. Consumer prices finished 1967 237.4% above their 1913 level. First-class postage held at 5 cents.

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The destination year: 1974

1974 was the year the postwar economy broke its old rules. Consumer prices rose 11.0%, the fastest annual increase since 1947, as the Arab oil embargo that ran from October 1973 to March 1974 roughly quadrupled the price of crude oil worldwide. Gasoline, which had averaged 38.5 cents a gallon in 1973, jumped to 53.2 cents, and shortages forced many states into odd-even rationing at the pump. Nixon’s wage and price controls, in place in some form since 1971, expired at the end of April, removing the last brake on prices just as the oil shock hit. Nixon himself resigned in August over Watergate, and Gerald Ford’s response to inflation, a voluntary “Whip Inflation Now” campaign built around lapel buttons, became a symbol of how little conventional politics could do against the problem. Prices kept climbing even as the economy weakened: a recession that started in November 1973 dragged on, the Dow fell to a bear-market bottom of 577.60 in December, and unemployment was already rising toward the 9% it would reach in 1975. The combination of rising prices and a shrinking economy gave the decade its name: stagflation.

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