Value of $100 in 1967, adjusted to 1978

What happened to prices between 1967 and 1978

Between 1967 and 1978, the Consumer Price Index went from 33.4 to 65.2. Cumulatively, prices increased 95.2%, which works out to an average of 6.27% per year. Put differently, a dollar in 1967 bought what $0.51 buys in 1978.

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: 1978

Consumer prices rose 7.6% in 1978, accelerating for a second straight year as rising wages, a weakening dollar, and climbing energy costs outpaced the Federal Reserve’s response. Fed chairman G. William Miller, appointed by Carter that March, kept interest rates too low to slow the trend, a policy later cited as one reason inflation kept building toward the following year’s crisis. California voters responded to their own version of the problem that June, passing Proposition 13 by nearly two to one to cap property tax rates after years of rising home values had pushed tax bills up alongside them. Foreign policy delivered one of the decade’s genuine breakthroughs: President Carter brought Egyptian President Anwar Sadat and Israeli Prime Minister Menachem Begin together for thirteen days of negotiations at Camp David that September, producing a framework for peace between the two countries that was signed as a treaty the following March. First-class postage rose to 15 cents that May 29, a rate that would hold longer than any other in the decade. The year ended in tragedy: cult leader Jim Jones directed the mass murder-suicide of more than 900 followers at a remote settlement in Guyana that November 18. A median household earned $15,064 in 1978, a new home sold for a median $55,700, and gas averaged 63 cents a gallon. Consumer prices stood 558.6% above their 1913 level, with the decade’s worst inflation still to come.

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