Consumer prices rose 7.9% in 1951, up sharply from 1950’s 1.3% and the fastest increase since 1947, as Korean War buying and a defense spending surge hit an economy still adjusting to peacetime. Much of the jump came early in the year, before the government stepped in: the Office of Price Stabilization imposed a general ceiling on prices January 26, and the Wage Stabilization Board froze wages soon after, the broadest peacetime controls since the war began that June. The year’s more lasting change came in monetary policy. On March 4, the Treasury and the Federal Reserve signed the Accord, ending the Fed’s wartime obligation to hold down interest rates on government bonds and freeing the central bank to fight inflation on its own terms for the first time since 1942, a shift that would shape Fed independence for decades. Congress raised taxes that October to help pay for the war: the Revenue Act of 1951, signed October 20, lifted individual and corporate income taxes along with a range of excise taxes, the third increase in taxes since fighting began in Korea. Consumer prices finished 1951 162.6% above their 1913 level. First-class postage held at 3 cents, and the minimum wage stayed at 75 cents an hour.
Year in review
Inflation in 1951
The U.S. inflation rate in 1951 was 7.9% (CPI: 26). Convert 1951 dollars to today →
7.9% 1951 inflation rate
2.1% 1950s average
9.4% peak month (Feb)
6.0% lowest month (Dec)
What things cost in 1951
| First-class stamp | $0.03 |
|---|---|
| Federal minimum wage | $0.75 |
What $100 from 1951 was worth later
| In 1960 | $114 |
|---|---|
| In 1970 | $149 |
| In 1980 | $317 |
| In 1990 | $503 |
| In 2000 | $662 |
| In 2010 | $839 |
| In 2020 | $995 |
| In 2026 | $1,276 |
Inflation in 1951, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 25.4 | 8.1% |
| February | 25.7 | 9.4% |
| March | 25.8 | 9.3% |
| April | 25.8 | 9.3% |
| May | 25.9 | 9.3% |
| June | 25.9 | 8.8% |
| July | 25.9 | 7.5% |
| August | 25.9 | 6.6% |
| September | 26.1 | 7.0% |
| October | 26.2 | 6.5% |
| November | 26.4 | 6.9% |
| December | 26.5 | 6.0% |
Economic events of 1951
- Consumer prices rise 7.9%, the fastest increase since 1947 Korean War buying, a defense spending surge, and fear of renewed shortages pushed prices up sharply in the first months of the year, before a government price freeze slowed the pace.
- The government freezes prices and wages The Office of Price Stabilization imposed a general ceiling on prices January 26, and the Wage Stabilization Board froze wages soon after, the broadest peacetime controls since the Korean War began.
- The Treasury and the Federal Reserve sign the Accord The March 4 agreement ended the Fed's wartime obligation to hold down interest rates on government bonds, freeing the central bank to fight inflation with monetary policy for the first time since 1942.
- Congress raises taxes to help fund the war The Revenue Act of 1951, signed October 20, raised individual and corporate income taxes and a range of excise taxes, the third tax increase since the Korean War began.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; Federal Reserve History (Treasury-Fed Accord); U.S. Department of the Treasury, history of the Office of Price Stabilization.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.