Value of $100 in 1972, adjusted to 2013

What happened to prices between 1972 and 2013

Between 1972 and 2013, the Consumer Price Index went from 41.8 to 232.957. Cumulatively, prices increased 457.3%, which works out to an average of 4.28% per year. Put differently, a dollar in 1972 bought what $0.18 buys in 2013: the 1972 dollar lost 82.1% of its purchasing power over these 41 years.

Consumer prices rose just 3.2% in 1972, the calmest year of the decade and a sharp break from the previous two years. The relief was largely engineered: Nixon’s wage and price controls, imposed as a 90-day freeze in August 1971, had settled into a series of “phases” that capped how much businesses could raise prices through the election year. Economists would later argue the controls mostly deferred inflation rather than curing it, storing up pressure that broke loose once they were lifted. Nixon spent political capital on foreign policy that year, traveling to Beijing that February in the first visit by a sitting U.S. president to the People’s Republic of China, a trip that began normalizing relations Washington had frozen since 1949. Closer to home, five men were arrested breaking into the Democratic National Committee’s offices at the Watergate complex that June 17, an event that drew little attention at the time but would eventually force Nixon from office. None of it dented his re-election bid: Nixon carried 49 states against Democrat George McGovern that November, helped by an economy that, on paper, looked more stable than it had in years. A median household earned $9,697 in 1972, a new home sold for a median $27,600, and gas held near 36 cents a gallon for a third straight year. Consumer prices stood 322.2% above their 1913 level, a lull that would not survive contact with the controls’ expiration and the oil shock still to come.

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The destination year: 2013

In 2013, prices rose 1.5% and $100 from 1972 had the buying power of $557; 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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