Consumer prices rose just 3.2% in 1972, the calmest year of the decade and a sharp break from the previous two years. The relief was largely engineered: Nixon’s wage and price controls, imposed as a 90-day freeze in August 1971, had settled into a series of “phases” that capped how much businesses could raise prices through the election year. Economists would later argue the controls mostly deferred inflation rather than curing it, storing up pressure that broke loose once they were lifted. Nixon spent political capital on foreign policy that year, traveling to Beijing that February in the first visit by a sitting U.S. president to the People’s Republic of China, a trip that began normalizing relations Washington had frozen since 1949. Closer to home, five men were arrested breaking into the Democratic National Committee’s offices at the Watergate complex that June 17, an event that drew little attention at the time but would eventually force Nixon from office. None of it dented his re-election bid: Nixon carried 49 states against Democrat George McGovern that November, helped by an economy that, on paper, looked more stable than it had in years. A median household earned $9,697 in 1972, a new home sold for a median $27,600, and gas held near 36 cents a gallon for a third straight year. Consumer prices stood 322.2% above their 1913 level, a lull that would not survive contact with the controls’ expiration and the oil shock still to come.
Year in review
Inflation in 1972
The U.S. inflation rate in 1972 was 3.2% (CPI: 41.8). Convert 1972 dollars to today →
3.2% 1972 inflation rate
7.1% 1970s average
3.7% peak month (Nov)
2.7% lowest month (Jun)
What things cost in 1972
| Median household income | $9,697 |
|---|---|
| Gas (per gallon) | $0.36 |
| Median home price | $27,600 |
| First-class stamp | $0.08 |
| Federal minimum wage | $1.60 |
What $100 from 1972 was worth later
| In 1980 | $197 |
|---|---|
| In 1990 | $313 |
| In 2000 | $412 |
| In 2010 | $522 |
| In 2020 | $619 |
| In 2026 | $793 |
Inflation in 1972, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 41.1 | 3.3% |
| February | 41.3 | 3.5% |
| March | 41.4 | 3.5% |
| April | 41.5 | 3.5% |
| May | 41.6 | 3.2% |
| June | 41.7 | 2.7% |
| July | 41.9 | 2.9% |
| August | 42 | 2.9% |
| September | 42.1 | 3.2% |
| October | 42.3 | 3.4% |
| November | 42.4 | 3.7% |
| December | 42.5 | 3.4% |
Economic events of 1972
- Consumer prices rise just 3.2%, the calmest year of the decade Nixon's wage and price controls, extended into a series of "phases" after the initial 1971 freeze, held measured inflation down through the election year, though economists later argued the controls mainly deferred price increases rather than eliminating them.
- Nixon travels to China, reopening relations after 23 years The February visit, the first by a sitting U.S. president to the People's Republic of China, began a normalization process that would not produce formal diplomatic relations until 1979.
- The Watergate break-in sets up Nixon's eventual downfall Five men were arrested breaking into the Democratic National Committee's offices at the Watergate complex in Washington on June 17, 1972. The scandal that unraveled from the cover-up would force Nixon's resignation two years later.
- Nixon wins re-election in a landslide Nixon defeated Democrat George McGovern in November, carrying 49 states, with the economy's calm inflation numbers and the controls still in place muting one of his opponent's central lines of attack.
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 (Watergate; the 1972 election).
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.