Consumer prices fell 9.9% in 1932, the steepest single-year drop in the CPI’s history to that point and the third straight year of decline following 1930 and 1931. Wages, farm incomes, and industrial output all kept falling, and Congress tried to arrest the credit collapse by creating the Reconstruction Finance Corporation that January, capitalized at $500 million with authority to borrow up to $1.5 billion to lend directly to banks, railroads, and other struggling businesses. Relief did not reach ordinary households as quickly. That summer, tens of thousands of World War I veterans and their families camped in Washington demanding early payment of a service bonus not due until 1945; in July, U.S. Army troops under General Douglas MacArthur forcibly dispersed the encampment, an episode that badly damaged the Hoover administration’s standing months before an election it was already losing. Voters delivered their verdict on November 8, electing Franklin D. Roosevelt in a landslide over the incumbent Hoover on a promise of relief and a “new deal for the American people.” Roosevelt would not take office until the following March, leaving a long and difficult transition during the depths of the crisis. First-class postage rose from 2 cents to 3 cents on July 6, the first change to the rate since 1919.
Year in review
Inflation in 1932
The U.S. inflation rate in 1932 was -9.9% (CPI: 13.7). Convert 1932 dollars to today →
-9.9% 1932 inflation rate
-1.9% 1930s average
-9.9% peak month (Jun)
-10.7% lowest month (Oct)
What things cost in 1932
| First-class stamp | $0.03 |
|---|
What $100 from 1932 was worth later
| In 1940 | $102 |
|---|---|
| In 1950 | $176 |
| In 1960 | $216 |
| In 1970 | $283 |
| In 1980 | $601 |
| In 1990 | $954 |
| In 2000 | $1,257 |
| In 2010 | $1,592 |
| In 2020 | $1,889 |
| In 2026 | $2,421 |
Inflation in 1932, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 14.3 | -10.1% |
| February | 14.1 | -10.2% |
| March | 14 | -10.3% |
| April | 13.9 | -10.3% |
| May | 13.7 | -10.5% |
| June | 13.6 | -9.9% |
| July | 13.6 | -9.9% |
| August | 13.5 | -10.6% |
| September | 13.4 | -10.7% |
| October | 13.3 | -10.7% |
| November | 13.2 | -10.2% |
| December | 13.1 | -10.3% |
Economic events of 1932
- Consumer prices fall 9.9%, the steepest annual drop of the Depression The decline was the sharpest single-year fall in the CPI's history to that point, capping three straight years of shrinking prices as wages, farm incomes, and industrial output all kept falling.
- Congress creates the Reconstruction Finance Corporation Signed into law January 22, the RFC was capitalized at $500 million with authority to borrow up to $1.5 billion, and it began lending directly to banks, railroads, and other struggling businesses in an attempt to halt the credit collapse. It became a template for the New Deal lending agencies that followed.
- The Bonus Army is dispersed from Washington Tens of thousands of World War I veterans and their families camped in the capital that summer demanding early payment of a service bonus not due until 1945. In July, U.S. Army troops under General Douglas MacArthur forcibly cleared the encampment, an episode that badly damaged the Hoover administration's standing.
- Franklin D. Roosevelt is elected president Roosevelt defeated the incumbent Hoover in a landslide on November 8, carrying 42 of 48 states on a promise of relief and a "new deal for the American people." He would not take office until the following March.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; National Bureau of Economic Research, US Business Cycle Expansions and Contractions; Federal Reserve History; USPS historical postage rates.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.