Consumer prices rose 1.6% in 1965, up from 1964’s 1.3% in a pickup that economists later mark as the start of the Great Inflation, a run of accelerating price increases driven by rising Vietnam War spending layered on top of new Great Society programs. The war itself escalated on the ground that March, when about 3,500 Marines came ashore at Da Nang, the first American combat troops committed to Vietnam; troop levels would climb toward 200,000 by year’s end. Domestic policy expanded just as fast: Medicare and Medicaid became law that July 30, creating federal health insurance for older and low-income Americans, and the Voting Rights Act, signed that August 6, banned literacy tests and other devices used to disenfranchise Black voters. The civil rights movement’s gains coexisted with urban unrest that same August, when a highway patrol traffic stop in the Watts neighborhood of Los Angeles set off six days of rioting that left 34 people dead. Consumer prices finished 1965 218.2% above their 1913 level. First-class postage held at 5 cents, and the minimum wage stayed at $1.25 an hour.
Year in review
Inflation in 1965
The U.S. inflation rate in 1965 was 1.6% (CPI: 31.5). Convert 1965 dollars to today →
1.6% 1965 inflation rate
2.4% 1960s average
1.9% peak month (Jun)
1.0% lowest month (Jan)
What things cost in 1965
| First-class stamp | $0.05 |
|---|---|
| Federal minimum wage | $1.25 |
What $100 from 1965 was worth later
| In 1970 | $123 |
|---|---|
| In 1980 | $262 |
| In 1990 | $415 |
| In 2000 | $547 |
| In 2010 | $692 |
| In 2020 | $822 |
| In 2026 | $1,053 |
Inflation in 1965, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 31.2 | 1.0% |
| February | 31.2 | 1.0% |
| March | 31.3 | 1.3% |
| April | 31.4 | 1.6% |
| May | 31.4 | 1.6% |
| June | 31.6 | 1.9% |
| July | 31.6 | 1.6% |
| August | 31.6 | 1.9% |
| September | 31.6 | 1.6% |
| October | 31.7 | 1.9% |
| November | 31.7 | 1.6% |
| December | 31.8 | 1.9% |
Economic events of 1965
- Consumer prices rise 1.6%, a pickup that marks the start of the Great Inflation Rising Vietnam War spending, layered on top of new Great Society programs, began a run of accelerating price increases that would not break until the early 1980s.
- Medicare and Medicaid become law Signed July 30 as amendments to the Social Security Act, the law created federal health insurance for Americans 65 and older (Medicare) and a joint federal-state program for low-income Americans (Medicaid). Medicare coverage would begin the following July.
- The first U.S. combat troops land in Vietnam About 3,500 Marines came ashore at Da Nang on March 8, the first American ground combat forces committed to the war. Troop levels would climb toward 200,000 by year's end.
- The Voting Rights Act is signed into law Signed August 6, the law banned literacy tests and other devices used to disenfranchise Black voters and authorized federal oversight of elections in states with a history of discrimination.
- Watts erupts in six days of rioting Sparked by a highway patrol traffic stop on August 11 in the Watts neighborhood of Los Angeles, the unrest left 34 people dead and hundreds of buildings destroyed, one of the deadliest urban riots of the decade.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; Centers for Medicare & Medicaid Services, program history; U.S. Department of State, Office of the Historian (Vietnam War); National Archives (Voting Rights Act of 1965); California State Archives (Watts riots).
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.