Consumer prices rose 4.2% in 1968, up sharply from 1967’s 3.1% and the fastest pace in 17 years, as Vietnam War spending and a tight labor market pushed inflation higher despite the Federal Reserve’s earlier tightening. The year was marked by political violence: Martin Luther King Jr. was assassinated on a motel balcony in Memphis on April 4, touching off rioting in more than 100 cities, and Robert F. Kennedy was shot in Los Angeles on June 5, moments after winning California’s Democratic presidential primary, and died the next day. Washington tried to answer the inflation problem directly that June 28, when Congress passed a 10% income tax surcharge, the Revenue and Expenditure Control Act, temporarily raising taxes and cutting spending to cool an economy overheated by war and Great Society outlays; prices kept accelerating anyway. The cost of living rose in smaller, more visible ways too: first-class postage climbed to 6 cents that January 7, and the minimum wage rose to $1.60 an hour that February 1, the final step of the increase Congress had set two years earlier. Consumer prices finished 1968 251.5% above their 1913 level.
Year in review
Inflation in 1968
The U.S. inflation rate in 1968 was 4.2% (CPI: 34.8). Convert 1968 dollars to today →
4.2% 1968 inflation rate
2.4% 1960s average
4.7% peak month (Oct)
3.6% lowest month (Jan)
What things cost in 1968
| First-class stamp | $0.06 |
|---|---|
| Federal minimum wage | $1.60 |
What $100 from 1968 was worth later
| In 1970 | $111 |
|---|---|
| In 1980 | $237 |
| In 1990 | $376 |
| In 2000 | $495 |
| In 2010 | $627 |
| In 2020 | $744 |
| In 2026 | $953 |
Inflation in 1968, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 34.1 | 3.6% |
| February | 34.2 | 4.0% |
| March | 34.3 | 3.9% |
| April | 34.4 | 3.9% |
| May | 34.5 | 3.9% |
| June | 34.7 | 4.2% |
| July | 34.9 | 4.5% |
| August | 35 | 4.5% |
| September | 35.1 | 4.5% |
| October | 35.3 | 4.7% |
| November | 35.4 | 4.7% |
| December | 35.5 | 4.7% |
Economic events of 1968
- Consumer prices rise 4.2%, the fastest pace in 17 years Not since 1951, during the Korean War buildup, had prices climbed this fast in a single year, as Vietnam War spending and a tight labor market pushed inflation higher despite the Fed's earlier tightening.
- Martin Luther King Jr. is assassinated in Memphis King was shot on a motel balcony on April 4, touching off rioting in more than 100 cities across the country.
- Robert F. Kennedy is assassinated in Los Angeles Kennedy was shot on June 5, moments after winning California's Democratic presidential primary, and died the following day.
- Congress passes a 10% income tax surcharge to fight inflation The Revenue and Expenditure Control Act, signed June 28, temporarily raised taxes and cut spending in a bid to cool an economy overheated by Vietnam War and Great Society outlays; inflation kept accelerating anyway.
- First-class postage rises to 6 cents and the minimum wage to $1.60 Postage rose that January 7, and the minimum wage rose that February 1, the second and final step of the increase Congress had set in 1966.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; National Archives (the assassinations of Martin Luther King Jr. and Robert F. Kennedy); Internal Revenue Service, history of federal income tax rates; USPS historical postage rates; 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.