1916 was when World War I first showed up clearly in American price tags. Consumer prices rose 7.9% for the year, easily the sharpest increase since the Bureau of Labor Statistics’ CPI history begins in 1913, as factories ran flat out to fill steel, munitions, and food orders from Britain and France. Railroad workers felt the squeeze from rising living costs enough to threaten a nationwide strike; Congress headed it off in September with the Adamson Act, which set an eight-hour standard workday for interstate rail employees, the first federal law of its kind covering private-sector hours. Washington was also preparing more directly for war: the National Defense Act, signed in June, expanded the Army and National Guard and funded new government-owned munitions plants, adding another source of demand to an economy already running hot. Woodrow Wilson won re-election in November largely on having kept the country out of the fighting so far, a promise that would not survive the following spring. A first-class stamp still cost 2 cents, one of the few prices that had not yet moved.
Year in review
Inflation in 1916
The U.S. inflation rate in 1916 was 7.9% (CPI: 10.9). Convert 1916 dollars to today →
7.9% 1916 inflation rate
10.0% 1910s average
12.6% peak month (Dec)
3.0% lowest month (Jan)
What things cost in 1916
| First-class stamp | $0.02 |
|---|
What $100 from 1916 was worth later
| In 1920 | $183 |
|---|---|
| In 1930 | $153 |
| In 1940 | $128 |
| In 1950 | $221 |
| In 1960 | $272 |
| In 1970 | $356 |
| In 1980 | $756 |
| In 1990 | $1,199 |
| In 2000 | $1,580 |
| In 2010 | $2,001 |
| In 2020 | $2,374 |
| In 2026 | $3,043 |
Inflation in 1916, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 10.4 | 3.0% |
| February | 10.4 | 4.0% |
| March | 10.5 | 6.1% |
| April | 10.6 | 6.0% |
| May | 10.7 | 5.9% |
| June | 10.8 | 6.9% |
| July | 10.8 | 6.9% |
| August | 10.9 | 7.9% |
| September | 11.1 | 9.9% |
| October | 11.3 | 10.8% |
| November | 11.5 | 11.7% |
| December | 11.6 | 12.6% |
Economic events of 1916
- Consumer prices jump 7.9% for the year After two years of near-flat prices, 1916 brought the first sharp increase of the World War I era. Factories running at capacity to fill Allied war orders, combined with shipping disruptions and rising raw material costs, pushed prices up across the economy well before the United States itself entered the war.
- The Adamson Act sets an eight-hour day for railroad workers Signed on September 3, 1916, to head off a threatened nationwide rail strike, the law capped a standard workday at eight hours (with overtime pay) for interstate railroad employees. It was the first federal law regulating the hours of private-sector workers, part of a wave of strikes and wage demands as the cost of living climbed.
- The National Defense Act expands the Army and National Guard Signed June 3, 1916, the act grew the regular Army and National Guard and authorized new government-owned munitions plants. It was the clearest sign yet that Washington was preparing for the possibility of joining the war in Europe, and the added military spending fed the wartime industrial boom already pushing prices higher.
Sources: USPS historical postage rates; U.S. Bureau of Labor Statistics, Consumer Price Index history.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.