Value of $100 in 1970, adjusted to 2013

What happened to prices between 1970 and 2013

Between 1970 and 2013, the Consumer Price Index went from 38.8 to 232.957. Cumulatively, prices increased 500.4%, which works out to an average of 4.26% per year. Put differently, a dollar in 1970 bought what $0.17 buys in 2013: the 1970 dollar lost 83.3% of its purchasing power over these 43 years.

Consumer prices rose 5.7% in 1970, up from 1969’s 5.5%, extending a run of faster price growth that stretched back to the mid-1960s, even as a recession that began in December 1969 pushed unemployment toward 6%. Prices and joblessness rising together confounded the era’s economic thinking, which held that policymakers could trade a little more inflation for a little less unemployment; 1970 was an early sign that trade-off was breaking down, a pattern that would harden into stagflation later in the decade. Washington restructured how it delivered mail that year: after postal workers staged the first strike ever by federal employees that March, Congress passed the Postal Reorganization Act in August, replacing the cabinet-level Post Office Department with the independent U.S. Postal Service. Environmental policy also took shape in 1970. An estimated 20 million Americans marked the first Earth Day on April 22, and the Environmental Protection Agency opened that December to enforce the Clean Air Act and the pollution rules that followed. The Vietnam War kept dividing the country: on May 4, National Guard troops fired on antiwar demonstrators at Kent State University in Ohio, killing four students and setting off strikes on hundreds of campuses. A median household earned $8,734 that year, a gallon of gas averaged 36 cents, and a first-class stamp cost 6 cents, the rate it had held since 1968. Prices stood 291.9% above their 1913 level by the end of 1970, a milestone that would look almost mild against the decade still to come.

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The destination year: 2013

In 2013, prices rose 1.5% and $100 from 1970 had the buying power of $600; the year's average CPI of 232.957 is the level behind every 2013 figure on this page.

2013 was a low-inflation year with a lot of noise around the Federal Reserve. Consumer prices rose 1.5%, below the Fed’s 2% target, and gasoline eased to an average of $3.51 a gallon. Housing was the exception: the median new home sold for about $268,900, up sharply from $245,200 in 2012, as the market recovered from its post-crisis bottom.

The Fed dominated the news. Chairman Ben Bernanke’s May comments about slowing bond purchases pushed long-term interest rates up by roughly a percentage point that summer, and mortgages became more expensive within weeks. In December the Fed finally announced a first small cut to its purchases while promising to keep short-term rates near zero for a long time.

Washington added its own disruption. A 16-day government shutdown in October delayed data releases and left a hole in that month’s CPI collection. Median household income was reported at $53,585, the federal minimum wage stayed at $7.25, and a first-class stamp cost 46 cents. The decade’s pattern was taking shape: slow price growth, ultra-low interest rates, and a labor market that improved gradually.

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