Consumer prices fell 1.2% in 1949, down from 1948’s 8.1% gain and the first annual decline since 1939, the first real break in a decade otherwise defined by wartime and postwar inflation. A mild recession drove the drop: the National Bureau of Economic Research dates a downturn from November 1948 to October 1949, as businesses worked off inventories built up during the postwar buying boom and price pressure finally eased. The Cold War hardened around the same time. On April 4, the United States, Canada, and ten Western European nations signed the North Atlantic Treaty, committing to treat an attack on one member as an attack on all and formalizing the Western alliance against Soviet expansion. That August 29, the Soviet Union tested its first atomic bomb, ending the American nuclear monopoly just four years after Hiroshima and Nagasaki and setting off an arms race that would run for decades. Congress closed out the decade’s wage policy that October, passing the Fair Labor Standards Amendments of 1949 to raise the federal minimum wage to 75 cents an hour effective the following January, nearly double the 40 cents that had held since 1945. The decade closed with consumer prices 140.4% above their 1913 level, up 70% since 1940 alone even after 1949’s decline. First-class postage held at 3 cents.
Year in review
Inflation in 1949
The U.S. inflation rate in 1949 was -1.2% (CPI: 23.8). Convert 1949 dollars to today →
-1.2% 1949 inflation rate
5.6% 1940s average
1.7% peak month (Mar)
-2.9% lowest month (Jul)
What things cost in 1949
| First-class stamp | $0.03 |
|---|---|
| Federal minimum wage | $0.40 |
What $100 from 1949 was worth later
| In 1950 | $101 |
|---|---|
| In 1960 | $124 |
| In 1970 | $163 |
| In 1980 | $346 |
| In 1990 | $549 |
| In 2000 | $724 |
| In 2010 | $916 |
| In 2020 | $1,087 |
| In 2026 | $1,394 |
Inflation in 1949, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 24 | 1.3% |
| February | 23.8 | 1.3% |
| March | 23.8 | 1.7% |
| April | 23.9 | 0.4% |
| May | 23.8 | -0.4% |
| June | 23.9 | -0.8% |
| July | 23.7 | -2.9% |
| August | 23.8 | -2.9% |
| September | 23.9 | -2.4% |
| October | 23.7 | -2.9% |
| November | 23.8 | -1.7% |
| December | 23.6 | -2.1% |
Economic events of 1949
- Consumer prices fall 1.2%, the first annual decline since 1939 A mild postwar recession, dated by the National Bureau of Economic Research from November 1948 to October 1949, and the fading of pent-up wartime demand finally broke the inflation that had run almost uninterrupted since 1940.
- The North Atlantic Treaty creates NATO Signed April 4 by the United States, Canada, and ten Western European nations, the treaty committed its members to treat an attack on one as an attack on all, formalizing the Western alliance against Soviet expansion.
- The Soviet Union tests its first atomic bomb, ending the U.S. nuclear monopoly The August 29 test, detected by American surveillance that September, came four years after Hiroshima and Nagasaki and set off an arms race that would define the rest of the Cold War.
- Congress raises the federal minimum wage to 75 cents an hour The Fair Labor Standards Amendments of 1949, signed October 26, nearly doubled the wage floor from 40 cents, effective the following January, the law's first increase since 1945.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; National Bureau of Economic Research, US Business Cycle Expansions and Contractions; U.S. Department of State, Office of the Historian (NATO; Soviet atomic test); U.S. Department of Labor, history of the Fair Labor Standards Act.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.