Value of $100 in 1969, adjusted to 2020

What happened to prices between 1969 and 2020

Between 1969 and 2020, the Consumer Price Index went from 36.7 to 258.811. Cumulatively, prices increased 605.2%, which works out to an average of 3.90% per year. Put differently, a dollar in 1969 bought what $0.14 buys in 2020.

Consumer prices rose 5.5% in 1969, up from 1968’s 4.2% and the fastest pace since the Korean War era, as years of Vietnam War spending, a labor market with unemployment under 4%, and expansionary fiscal policy finally showed up fully in prices. Richard Nixon was inaugurated that January 20, pledging to curb rising prices without wage and price controls, a position he would reverse within two years. The decade’s most triumphant moment came that July 20, when Neil Armstrong and Buzz Aldrin walked on the Moon while Michael Collins orbited above, fulfilling the goal Kennedy had set in 1961 of landing a man on the lunar surface before the decade’s end. Culture and protest both reached new extremes that year: an estimated 400,000 people gathered on a dairy farm in Bethel, New York, for the Woodstock music festival that August, and a police raid on the Stonewall Inn in New York’s Greenwich Village that June touched off days of resistance now credited with launching the modern gay rights movement. Consumer prices finished the decade 270.7% above their 1913 level, up 24.0% from where they stood in 1960. The 1960s had opened with inflation near 1% a year and closed with prices rising faster than at any point since Korea, setting up the Great Inflation that would define the 1970s. First-class postage held at 6 cents, and the minimum wage stayed at $1.60 an hour.

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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.

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