Consumer prices rose 0.7% in 1940, snapping 1939’s decline and marking the first increase since 1937. The gain was modest, and the CPI still stood 18.1% below its 1929 peak, a reminder of how far the recovery from the Depression’s trough had left to go even as defense orders from Britain and France began reaching American factories. War was already reshaping domestic policy well before it touched American soil. Congress passed the Selective Training and Service Act that September, the country’s first peacetime draft, requiring men aged 21 to 35 to register and authorizing the induction of up to 900,000 men a year, more than a year before Pearl Harbor. That November, Franklin Roosevelt won an unprecedented third term, defeating Republican Wendell Willkie after campaigning on keeping the United States out of the war then consuming Europe and Asia. The promise would not hold much longer: within two years, wartime demand would push consumer prices up faster than at any point since the aftermath of World War I. First-class postage held at 3 cents, and the federal minimum wage stayed at 30 cents an hour, the level set the previous October under the Fair Labor Standards Act.
Year in review
Inflation in 1940
The U.S. inflation rate in 1940 was 0.7% (CPI: 14). Convert 1940 dollars to today →
0.7% 1940 inflation rate
5.6% 1940s average
2.2% peak month (Jun)
-0.7% lowest month (Jan)
What things cost in 1940
| First-class stamp | $0.03 |
|---|---|
| Federal minimum wage | $0.30 |
What $100 from 1940 was worth later
| In 1950 | $172 |
|---|---|
| In 1960 | $211 |
| In 1970 | $277 |
| In 1980 | $589 |
| In 1990 | $934 |
| In 2000 | $1,230 |
| In 2010 | $1,558 |
| In 2020 | $1,849 |
| In 2026 | $2,369 |
Inflation in 1940, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 13.9 | -0.7% |
| February | 14 | 0.7% |
| March | 14 | 0.7% |
| April | 14 | 1.4% |
| May | 14 | 1.4% |
| June | 14.1 | 2.2% |
| July | 14 | 1.4% |
| August | 14 | 1.4% |
| September | 14 | -0.7% |
| October | 14 | 0.0% |
| November | 14 | 0.0% |
| December | 14.1 | 0.7% |
Economic events of 1940
- Consumer prices rise 0.7%, a modest gain as defense spending starts to build The increase was the first since 1937 and left the CPI still 18.1% below its 1929 peak, evidence the recovery from the Depression remained incomplete even as war orders from Britain and France began reaching American factories.
- Congress enacts the first peacetime draft The Selective Training and Service Act, signed September 16, required men aged 21 to 35 to register for military service and authorized the induction of up to 900,000 men a year, more than a year before Pearl Harbor drew the country into war.
- Roosevelt wins an unprecedented third term FDR defeated Republican Wendell Willkie that November, breaking the two-term precedent set by George Washington. He campaigned on keeping the United States out of the war then spreading across Europe and Asia.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; National Archives, Selective Training and Service Act of 1940; USPS historical postage rates.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.