Value of $100 in 1972, adjusted to 2014

What happened to prices between 1972 and 2014

Between 1972 and 2014, the Consumer Price Index went from 41.8 to 236.736. Cumulatively, prices increased 466.4%, which works out to an average of 4.22% per year. Put differently, a dollar in 1972 bought what $0.18 buys in 2014: the 1972 dollar lost 82.3% of its purchasing power over these 42 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.

More about inflation in 1972 →

The destination year: 2014

In 2014, prices rose 1.6% and $100 from 1972 had the buying power of $566; the year's average CPI of 236.736 is the level behind every 2014 figure on this page.

2014 ended with the sharpest oil price drop in years. Consumer prices rose 1.6% for the year, close to 2013’s pace, but the annual figure hid a shift at the pump: crude oil fell from above $100 a barrel in June to below $60 in December, and gasoline finished the year near $2.25 a gallon after averaging $3.37 across 2014. The drop reflected record U.S. shale output, softer global demand, and OPEC’s decision in November to keep producing.

For households, cheaper fuel arrived just as the labor market strengthened. Median household income was $53,657, essentially flat on the prior year, and the median new home sold for about $288,500. The federal minimum wage stayed at $7.25 for a fifth year, and a first-class stamp rose to 49 cents.

The Federal Reserve ended its bond purchases in October but left its policy rate at zero. A stronger dollar helped hold down import prices. Because energy weighs heavily in the CPI, the late-year slide carried into 2015, which posted the smallest annual increase of the decade.

More about inflation in 2014 →