Consumer prices fell 10.5% in 1921, the mirror image of the wartime inflation that had more than doubled the cost of living between 1913 and 1920. The Depression of 1920-21, one of the sharpest contractions in U.S. history, bottomed out that July according to the National Bureau of Economic Research, even though it had lasted barely eighteen months. Unemployment climbed toward one worker in ten as businesses cut production and prices to work through wartime inventories, but the same collapse in prices also meant the recovery, once it started, had room to run without reigniting inflation. Warren Harding took office March 4, promising a return to “normalcy” after a decade of war, pandemic, labor unrest, and rapid price swings; his administration moved quickly to cut top income tax rates and federal spending. Congress also acted on immigration that year: the Emergency Quota Act, signed May 19, capped annual arrivals from each country at 3% of that nationality’s population in the 1910 census, the first time the United States had set a numerical ceiling on immigration. The law favored northern and western Europe and cut total immigration by more than half compared with prewar levels; Congress tightened the formula again in 1924. First-class postage held at 2 cents, unchanged since mid-1919.
Year in review
Inflation in 1921
The U.S. inflation rate in 1921 was -10.5% (CPI: 17.9). Convert 1921 dollars to today →
-10.5% 1921 inflation rate
0.1% 1920s average
-1.6% peak month (Jan)
-15.8% lowest month (Jun)
What things cost in 1921
| First-class stamp | $0.02 |
|---|
What $100 from 1921 was worth later
| In 1930 | $93.30 |
|---|---|
| In 1940 | $78.21 |
| In 1950 | $135 |
| In 1960 | $165 |
| In 1970 | $217 |
| In 1980 | $460 |
| In 1990 | $730 |
| In 2000 | $962 |
| In 2010 | $1,218 |
| In 2020 | $1,446 |
| In 2026 | $1,853 |
Inflation in 1921, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 19 | -1.6% |
| February | 18.4 | -5.6% |
| March | 18.3 | -7.1% |
| April | 18.1 | -10.8% |
| May | 17.7 | -14.1% |
| June | 17.6 | -15.8% |
| July | 17.7 | -14.9% |
| August | 17.7 | -12.8% |
| September | 17.5 | -12.5% |
| October | 17.5 | -12.1% |
| November | 17.4 | -12.1% |
| December | 17.3 | -10.8% |
Economic events of 1921
- Consumer prices fall 10.5% as the postwar depression bottoms out The collapse in wholesale prices that began in 1920 spread through the full CPI basket in 1921, ending seven straight years of rising prices dating back to 1913. The National Bureau of Economic Research dates the Depression of 1920-21 to its trough that July, one of the steepest contractions on record even though it lasted barely a year and a half.
- Warren Harding is inaugurated, promising a return to "normalcy" Harding took office March 4, 1921, campaigning against the wartime controls, high taxes, and social upheaval of the preceding decade. His administration cut top income tax rates and federal spending as the economy climbed out of the postwar slump.
- The Emergency Quota Act sets the first numerical limits on immigration Signed May 19, 1921, the law capped annual immigration from each country at 3% of that nationality's U.S. population as counted in the 1910 census, favoring northern and western Europe and cutting overall immigration sharply. Congress tightened it further in 1924.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; National Bureau of Economic Research, US Business Cycle Expansions and Contractions; Library of Congress, Emergency Quota Act of 1921; USPS historical postage rates.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.