Consumer prices rose 1.3% in 1950, up from 1949’s 1.2% decline, a mild gain that hid a sharp turn partway through the year. The cost of living had been roughly flat through the spring, then jumped after North Korea invaded South Korea on June 25, setting off a wave of hoarding and defense buying reminiscent of World War II shortages. The United States entered the war within days under a United Nations mandate; American and South Korean forces were pushed back to the Pusan Perimeter that summer before a landing at Inchon that September reversed the front, and China’s entry into the war that November turned it into a longer stalemate. Congress moved to put the economy on a war footing that September, passing the Defense Production Act, which gave the president authority to direct industrial output toward the military and, if prices kept climbing, to impose formal wage and price controls. Domestic policy also expanded that year: the Social Security Amendments of 1950, signed August 28, raised benefits across the board and extended coverage to roughly 10 million more workers, the program’s first major expansion since it began in 1935. Consumer prices finished 1950 143.4% above their 1913 level, matching 1948’s postwar high after 1949’s brief decline. First-class postage held at 3 cents, and the minimum wage stood at 75 cents an hour after January’s increase.
Year in review
Inflation in 1950
The U.S. inflation rate in 1950 was 1.3% (CPI: 24.1). Convert 1950 dollars to today →
1.3% 1950 inflation rate
2.1% 1950s average
5.9% peak month (Dec)
-2.1% lowest month (Jan)
What things cost in 1950
| First-class stamp | $0.03 |
|---|---|
| Federal minimum wage | $0.75 |
What $100 from 1950 was worth later
| In 1960 | $123 |
|---|---|
| In 1970 | $161 |
| In 1980 | $342 |
| In 1990 | $542 |
| In 2000 | $715 |
| In 2010 | $905 |
| In 2020 | $1,074 |
| In 2026 | $1,376 |
Inflation in 1950, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 23.5 | -2.1% |
| February | 23.5 | -1.3% |
| March | 23.6 | -0.8% |
| April | 23.6 | -1.3% |
| May | 23.7 | -0.4% |
| June | 23.8 | -0.4% |
| July | 24.1 | 1.7% |
| August | 24.3 | 2.1% |
| September | 24.4 | 2.1% |
| October | 24.6 | 3.8% |
| November | 24.7 | 3.8% |
| December | 25 | 5.9% |
Economic events of 1950
- Consumer prices rise 1.3%, a mild year before the Korean War hits The modest annual gain masked a sharp turn partway through the year: prices had been roughly flat through the spring, then jumped after North Korea's invasion of the South that June set off a wave of hoarding and defense buying.
- North Korea invades South Korea, and the United States enters the war The June 25 invasion prompted a United Nations-backed intervention led by the United States; American and South Korean forces, pushed back to the Pusan Perimeter that summer, landed at Inchon that September and drove north before China entered the war that November.
- Congress passes the Defense Production Act Signed September 8, the law gave the president authority to direct industrial production toward the war effort and, if needed, impose wage and price controls, a tool the Truman administration would use more fully the following year.
- Social Security benefits rise for the first time since the program began The Social Security Amendments of 1950, signed August 28, raised benefits across the board and extended coverage to roughly 10 million more workers, the program's first major expansion since 1935.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; U.S. Department of State, Office of the Historian (Korean War); U.S. Social Security Administration, history of the Social Security Amendments of 1950.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.