US Inflation from 1916 to 1925
US inflation from 1916 to 1925 was +60.6%. $100 in 1916 had the same purchasing power as $160.55 in 1925 (avg. +5.40%/yr).
$100.00 in 1916 is worth
$160.55
in 1925
+60.6%
+5.40%/yr
How prices changed from 1916 to 1925
| Item | 1916 | 1925 | Change |
|---|---|---|---|
| Gallon of gas | $0.15 | $0.22 | +47% |
| Loaf of bread | $0.07 | $0.09 | +29% |
What Drove Inflation from 1916 to 1925
World War I & Postwar: The Federal Reserve's founding in 1913 and the onset of World War I in 1914 transformed the US economy. War production drove full employment and surging demand, while imports collapsed. Consumer prices nearly doubled between 1914 and 1920 as government borrowing and money creation fueled wartime spending. A sharp but brief postwar boom preceded a painful deflationary recession in 1920–21.
Roaring Twenties: After the 1920–21 deflation shock, the US economy roared back. Mass production techniques, especially in the auto industry, drove productivity gains and kept goods prices surprisingly stable even as wages rose. Consumer credit expanded rapidly, fueling purchases of cars, appliances, and homes. Financial speculation ran rampant, and the stock market tripled before the crash of October 1929 exposed the era's fragile foundations.
Understanding the Numbers
Over these 9 years, prices rose significantly — a total inflation rate of +60.6%. The annualized rate of +5.40% per year was above the historical average of roughly 3.3% per year.
Compare Other Periods
Starting from 1916:
Ending in 1925: