Value of $100 in 1972, adjusted to 2015

What happened to prices between 1972 and 2015

Between 1972 and 2015, the Consumer Price Index went from 41.8 to 237.017. Cumulatively, prices increased 467.0%, which works out to an average of 4.12% per year. Put differently, a dollar in 1972 bought what $0.18 buys in 2015: the 1972 dollar lost 82.4% of its purchasing power over these 43 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: 2015

In 2015, prices rose 0.1% and $100 from 1972 had the buying power of $567; the year's average CPI of 237.017 is the level behind every 2015 figure on this page.

2015 was almost a year with no inflation at all. Consumer prices rose 0.1%, the smallest increase since the 2009 decline, because energy prices kept falling. Gasoline averaged $2.45 a gallon, down from $3.37 in 2014, and a strong dollar made imported goods cheaper. The picture was different outside food and energy: core prices rose about 1.8% as rents and medical costs climbed.

Incomes finally showed real progress. Median household income reached $56,516, a large jump from $53,657, and the median new home sold for about $296,400. The federal minimum wage stayed at $7.25, and a first-class stamp stayed at 49 cents.

The Federal Reserve chose December to end its zero-rate policy, raising the target range to 0.25–0.50% for the first time since 2006. It moved even though headline inflation was far under 2%, arguing that the drag from energy was temporary. Earlier, a currency shift in China in August had shaken global markets and pushed oil below $40 a barrel. Prices in 2015 ended the year barely above their 2014 level.

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