Consumer prices rose 2.9% in 1966, nearly double 1965’s 1.6% as Vietnam War spending kept climbing without an offsetting tax increase, pushing the economy closer to capacity and prices higher along with it. Medicare coverage took effect that July 1, extending federal health insurance to roughly 19 million Americans age 65 and older under the program signed into law the year before. The Federal Reserve had already moved to cool the overheating economy, raising its discount rate the previous December over White House objections; the tightening carried into 1966 as the first postwar credit crunch, freezing parts of the housing and municipal bond markets even as inflation kept climbing. Congress widened the wage floor’s reach that September 23, when the Fair Labor Standards Amendments of 1966 set a $1.40 minimum wage effective the following February and extended coverage to roughly 9 million more workers in retail, hospitals, schools, and other services not previously covered. Consumer prices finished 1966 227.3% above their 1913 level. First-class postage held at 5 cents, and the minimum wage stayed at $1.25 an hour for the rest of the year.
Year in review
Inflation in 1966
The U.S. inflation rate in 1966 was 2.9% (CPI: 32.4). Convert 1966 dollars to today →
2.9% 1966 inflation rate
2.4% 1960s average
3.8% peak month (Oct)
1.9% lowest month (Jan)
What things cost in 1966
| First-class stamp | $0.05 |
|---|---|
| Federal minimum wage | $1.25 |
What $100 from 1966 was worth later
| In 1970 | $120 |
|---|---|
| In 1980 | $254 |
| In 1990 | $403 |
| In 2000 | $531 |
| In 2010 | $673 |
| In 2020 | $799 |
| In 2026 | $1,024 |
Inflation in 1966, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 31.8 | 1.9% |
| February | 32 | 2.6% |
| March | 32.1 | 2.6% |
| April | 32.3 | 2.9% |
| May | 32.3 | 2.9% |
| June | 32.4 | 2.5% |
| July | 32.5 | 2.8% |
| August | 32.7 | 3.5% |
| September | 32.7 | 3.5% |
| October | 32.9 | 3.8% |
| November | 32.9 | 3.8% |
| December | 32.9 | 3.5% |
Economic events of 1966
- Consumer prices rise 2.9%, nearly double the pace of the year before Vietnam War spending kept climbing without an offsetting tax increase, pushing the economy closer to capacity and prices higher along with it.
- Medicare coverage takes effect Beginning July 1, roughly 19 million Americans age 65 and older gained federal health insurance under the program signed into law the year before.
- Tight Fed policy triggers the first postwar credit crunch After the Federal Reserve raised its discount rate in December 1965 over White House objections, credit tightened sharply through 1966, freezing parts of the housing and municipal bond markets and slowing growth without yet curbing inflation.
- Congress raises the minimum wage and widens its coverage The Fair Labor Standards Amendments of 1966, signed September 23, set a $1.40 wage floor effective the following February and extended coverage to roughly 9 million more workers in retail, hospitals, schools, and other services not previously covered.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; Centers for Medicare & Medicaid Services, program history; Federal Reserve History (the 1966 credit crunch); U.S. Department of Labor, history of the federal minimum wage.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.