1917 is when World War I inflation stopped being a background trend and became the dominant fact of American economic life. Consumer prices rose 17.4% for the year, more than double the previous year’s already sharp increase, as the country’s April 6 entry into the war layered federal war spending on top of an economy already strained by military demand and worker shortages. Congress paid for the war with the War Revenue Act that October, which sharply raised income taxes, created a new tax on wartime business profits, and, in a small but very visible change for ordinary households, raised the cost of a first-class stamp from 2 cents to 3 cents that November, the rate’s first move since 1885. Herbert Hoover took over the new Food Administration in August and asked Americans to conserve food voluntarily rather than face formal rationing, a campaign that became famous enough that “Hooverize” entered the language as a verb for cutting back. None of it slowed prices much: the 17.4% increase would be topped again the very next year, in 1918.
Year in review
Inflation in 1917
The U.S. inflation rate in 1917 was 17.4% (CPI: 12.8). Convert 1917 dollars to today →
17.4% 1917 inflation rate
10.0% 1910s average
20.4% peak month (Jun)
12.5% lowest month (Jan)
What things cost in 1917
| First-class stamp | $0.02 |
|---|
What $100 from 1917 was worth later
| In 1920 | $156 |
|---|---|
| In 1930 | $130 |
| In 1940 | $109 |
| In 1950 | $188 |
| In 1960 | $231 |
| In 1970 | $303 |
| In 1980 | $644 |
| In 1990 | $1,021 |
| In 2000 | $1,345 |
| In 2010 | $1,704 |
| In 2020 | $2,022 |
| In 2026 | $2,591 |
Inflation in 1917, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 11.7 | 12.5% |
| February | 12 | 15.4% |
| March | 12 | 14.3% |
| April | 12.6 | 18.9% |
| May | 12.8 | 19.6% |
| June | 13 | 20.4% |
| July | 12.8 | 18.5% |
| August | 13 | 19.3% |
| September | 13.3 | 19.8% |
| October | 13.5 | 19.5% |
| November | 13.5 | 17.4% |
| December | 13.7 | 18.1% |
Economic events of 1917
- The United States declares war on Germany Congress declared war on April 6, 1917, ending three years of American neutrality in World War I. The shift to a full war economy, financed by new taxes and Liberty Bond drives, poured government spending into an economy that was already running short on labor and raw materials.
- Consumer prices climb 17.4% for the year Wartime demand, labor shortages as men left for the military, and disrupted shipping combined to produce the fastest annual price increase in the CPI's history to that point, more than double 1916's already sharp 7.9% rise.
- The War Revenue Act raises taxes and postage to pay for the war Signed October 3, 1917, the act sharply raised income tax rates, created a new excess-profits tax on wartime earnings, and raised first-class postage from 2 cents to 3 cents effective November 2, the first change to the stamp price since 1885.
- Herbert Hoover takes charge of the U.S. Food Administration Appointed in August under the newly passed Lever Food and Fuel Control Act, Hoover led a campaign for voluntary conservation, wheatless and meatless days, rather than mandatory rationing, to keep American troops and Allied civilians fed as food prices climbed with everything else.
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.