1920 was the last year of the inflation that had built since the war began: consumer prices rose 15.6% for the year, leaving the CPI more than double its 1913 starting level after seven straight years of increases. The boom behind those increases turned to bust before the year was over. The Federal Reserve, worried about speculation, pushed its discount rate to a record 7% that spring, and wholesale prices, which had led the wartime runup, began collapsing within months. The National Bureau of Economic Research dates the resulting downturn from January 1920 to July 1921, one of the shortest but steepest contractions in U.S. history, and consumer prices followed into outright decline, falling 10.5% in 1921. Two constitutional changes reshaped the country that year, too. The 18th Amendment’s ban on alcohol took legal effect January 17, enforced under the Volstead Act Congress had passed the previous October. Then, on August 18, Tennessee’s ratification of the 19th Amendment secured women’s right to vote nationwide, and women cast ballots in a presidential election for the first time that November, when Warren Harding won on a promise to return the country to “normalcy” after a decade of war, pandemic, and rising prices. First-class postage held at 2 cents, unchanged since mid-1919.
Year in review
Inflation in 1920
The U.S. inflation rate in 1920 was 15.6% (CPI: 20). Convert 1920 dollars to today →
15.6% 1920 inflation rate
0.1% 1920s average
23.7% peak month (Jun)
2.6% lowest month (Dec)
What things cost in 1920
| First-class stamp | $0.02 |
|---|
What $100 from 1920 was worth later
| In 1930 | $83.50 |
|---|---|
| In 1940 | $70.00 |
| In 1950 | $121 |
| In 1960 | $148 |
| In 1970 | $194 |
| In 1980 | $412 |
| In 1990 | $653 |
| In 2000 | $861 |
| In 2010 | $1,090 |
| In 2020 | $1,294 |
| In 2026 | $1,658 |
Inflation in 1920, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 19.3 | 17.0% |
| February | 19.5 | 20.4% |
| March | 19.7 | 20.1% |
| April | 20.3 | 21.6% |
| May | 20.6 | 21.9% |
| June | 20.9 | 23.7% |
| July | 20.8 | 19.5% |
| August | 20.3 | 14.7% |
| September | 20 | 12.4% |
| October | 19.9 | 9.9% |
| November | 19.8 | 7.0% |
| December | 19.4 | 2.6% |
Economic events of 1920
- Consumer prices rise 15.6% for the year, capping the wartime surge 1920 extended the run of double-digit inflation that started in 1916, leaving the CPI more than double its 1913 level. It was also the last year of that surge: within months the postwar boom curdled into one of the sharpest economic contractions in U.S. history.
- The Depression of 1920-21 begins Wartime demand evaporated and the Federal Reserve pushed its discount rate to a record 7% that spring to cool speculation. Wholesale prices, which had led the wartime runup, started collapsing within months. The National Bureau of Economic Research dates the resulting downturn from January 1920 to July 1921, one of the shortest but steepest contractions on record; consumer prices followed into outright decline the next year.
- Prohibition takes effect nationwide The 18th Amendment's ban on manufacturing, selling, and transporting alcoholic beverages became law on January 17, 1920, one year after ratification, enforced under the Volstead Act Congress had passed the previous October.
- The 19th Amendment is ratified, securing women's right to vote Tennessee became the 36th state to ratify on August 18, 1920, reaching the three-quarters majority required to amend the Constitution. Women voted in a presidential election for the first time that November, when Warren Harding won on a promise to return the country to "normalcy."
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; National Bureau of Economic Research, US Business Cycle Expansions and Contractions; USPS historical postage rates.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.