Consumer prices rose 6.2% in 1973, nearly double 1972’s 3.2%, as Nixon’s wage and price controls were phased out through the year and pressure the controls had been holding back broke loose. The bigger shock arrived that October, when Arab oil-producing states embargoed exports to the United States and other supporters of Israel in the Yom Kippur War. Crude oil, which had traded around $3 a barrel, approached $12 by early 1974, and gas lines became a fixture outside filling stations nationwide. Earlier in the year, the Paris Peace Accords, signed that January 27, ended direct American combat in Vietnam and set a 60-day deadline for withdrawing remaining U.S. troops, even as fighting between North and South Vietnam went on. Financial markets read the year correctly as a turning point: the Dow Jones Industrial Average peaked at 1,051.70 on January 11, a level it would not reach again until 1980, before the oil shock and rising interest rates dragged it into a two-year bear market. A median household earned $10,512 in 1973, a new home sold for a median $32,500, and gas averaged 38.5 cents a gallon, still under half of what the embargo’s effects would bring the following year. Consumer prices stood 348.5% above their 1913 level by year’s end, with the decade’s worst inflation still ahead.
Year in review
Inflation in 1973
The U.S. inflation rate in 1973 was 6.2% (CPI: 44.4). Convert 1973 dollars to today →
6.2% 1973 inflation rate
7.1% 1970s average
8.7% peak month (Dec)
3.6% lowest month (Jan)
What things cost in 1973
| Median household income | $10,512 |
|---|---|
| Gas (per gallon) | $0.39 |
| Median home price | $32,500 |
| First-class stamp | $0.08 |
| Federal minimum wage | $1.60 |
What $100 from 1973 was worth later
| In 1980 | $186 |
|---|---|
| In 1990 | $294 |
| In 2000 | $388 |
| In 2010 | $491 |
| In 2020 | $583 |
| In 2026 | $747 |
Inflation in 1973, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 42.6 | 3.6% |
| February | 42.9 | 3.9% |
| March | 43.3 | 4.6% |
| April | 43.6 | 5.1% |
| May | 43.9 | 5.5% |
| June | 44.2 | 6.0% |
| July | 44.3 | 5.7% |
| August | 45.1 | 7.4% |
| September | 45.2 | 7.4% |
| October | 45.6 | 7.8% |
| November | 45.9 | 8.3% |
| December | 46.2 | 8.7% |
Economic events of 1973
- Consumer prices rise 6.2% as controls are lifted and an oil embargo begins Inflation nearly doubled from 1972's 3.2% as Nixon's price controls were phased out through the year and, that October, Arab oil-producing states embargoed exports to the United States over its support for Israel in the Yom Kippur War.
- The Paris Peace Accords end direct U.S. involvement in Vietnam Signed January 27, 1973, the accords ended American combat operations and set a 60-day deadline for the withdrawal of remaining U.S. troops, though fighting between North and South Vietnam continued.
- OPEC's embargo quadruples the world price of oil Beginning that October and running until March 1974, the embargo cut oil supply to the United States and other Israel allies, pushing crude prices from about $3 a barrel toward $12 by early 1974 and triggering gas lines nationwide.
- The stock market peaks in January before a two-year slide The Dow Jones Industrial Average hit 1,051.70 on January 11, a level it would not see again until 1980, as the oil shock and rising rates set off a bear market that ran into 1974.
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. Energy Information Administration (gasoline); U.S. Department of Labor (minimum wage); USPS historical rates; National Archives (Paris Peace Accords).
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.