Consumer prices rose 4.4% in 1971, down from 1970’s 5.7% as the recession that started in December 1969 finally cooled demand. The bigger economic story came that August 15, when President Nixon closed the “gold window” that let foreign governments exchange dollars for gold, ending the Bretton Woods system that had anchored the dollar since World War II. The same address announced a 90-day freeze on wages and prices, the first peacetime controls the country had seen, an attempt to break inflationary expectations without the slower grind of tighter money. The “Nixon Shock,” as it came to be known, let the dollar float against other currencies for the first time and set the stage for a wage-and-price-control regime that would run in various forms into 1973. Politically, the country lowered its voting age that year: the 26th Amendment, ratified July 1, extended the vote to 18-year-olds, capping a campaign built on the argument that men old enough to be drafted to Vietnam were old enough to vote for the people who sent them. The Postal Service, independent since 1970’s reorganization, raised first-class postage from 6 to 8 cents that May. A median household earned $9,028 in 1971, up from $8,734 the year before, while gas held near 36 cents a gallon and a new home sold for a median $25,200. Consumer prices stood 309.1% above their 1913 level by year’s end, still years away from the double-digit inflation the controls were meant to prevent.
Year in review
Inflation in 1971
The U.S. inflation rate in 1971 was 4.4% (CPI: 40.5). Convert 1971 dollars to today →
4.4% 1971 inflation rate
7.1% 1970s average
5.3% peak month (Jan)
3.3% lowest month (Dec)
What things cost in 1971
| Median household income | $9,028 |
|---|---|
| Gas (per gallon) | $0.36 |
| Median home price | $25,200 |
| First-class stamp | $0.08 |
| Federal minimum wage | $1.60 |
What $100 from 1971 was worth later
| In 1980 | $203 |
|---|---|
| In 1990 | $323 |
| In 2000 | $425 |
| In 2010 | $538 |
| In 2020 | $639 |
| In 2026 | $819 |
Inflation in 1971, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 39.8 | 5.3% |
| February | 39.9 | 5.0% |
| March | 40 | 4.7% |
| April | 40.1 | 4.2% |
| May | 40.3 | 4.4% |
| June | 40.6 | 4.6% |
| July | 40.7 | 4.4% |
| August | 40.8 | 4.6% |
| September | 40.8 | 4.1% |
| October | 40.9 | 3.8% |
| November | 40.9 | 3.3% |
| December | 41.1 | 3.3% |
Economic events of 1971
- Consumer prices rise 4.4%, easing from 1970's pace Inflation slowed as the recession that started in December 1969 cooled demand, though price growth remained well above the roughly 1-2% rates Americans had grown used to earlier in the 1960s.
- Nixon ends the dollar's convertibility to gold and freezes wages and prices In a televised address on August 15, President Nixon closed the "gold window" that let foreign governments exchange dollars for gold, effectively ending the Bretton Woods system, and imposed a 90-day freeze on wages and prices, the first peacetime controls in U.S. history.
- The voting age drops to 18 with ratification of the 26th Amendment Ratified on July 1, 1971, the amendment lowered the voting age from 21 to 18 nationwide, driven largely by the argument that men old enough to be drafted for Vietnam should be old enough to vote.
- First-class postage rises to 8 cents The Postal Service, newly independent after 1970's reorganization, raised the first-class rate from 6 to 8 cents that May, its first increase in three years.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index history; U.S. Census Bureau, Current Population Survey (income); U.S. Census Bureau, New Residential Sales (home price); U.S. Department of Labor (minimum wage); USPS historical rates; National Archives (26th Amendment).
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.