US Inflation from 1932 to 1940
US inflation from 1932 to 1940 was +2.2%. $100 in 1932 had the same purchasing power as $102.19 in 1940 (avg. +0.27%/yr).
$100.00 in 1932 is worth
$102.19
in 1940
+2.2%
+0.27%/yr
How prices changed from 1932 to 1940
| Item | 1932 | 1940 | Change |
|---|---|---|---|
| Gallon of gas | $0.15 | $0.18 | +20% |
| Loaf of bread | $0.07 | $0.08 | +14% |
What Drove Inflation from 1932 to 1940
Great Depression: The stock market crash of 1929 triggered bank panics, credit contraction, and the worst deflation in modern American history. Consumer prices fell nearly 25% between 1929 and 1933 as unemployment exceeded 25% and output collapsed. Roosevelt's New Deal programs stabilized prices and boosted demand, but a premature fiscal tightening in 1937–38 caused a painful recession-within-depression. Full recovery awaited wartime mobilization.
World War II: The US entry into World War II following Pearl Harbor transformed the economy virtually overnight. Defense spending surged to over 40% of GDP, unemployment vanished, and inflationary pressures built rapidly. The government responded with comprehensive wage and price controls, rationing, and war bond drives that suppressed spending. Officially measured inflation was moderate, but pent-up demand and informal price pressures were immense.
Understanding the Numbers
Over these 8 years, prices rose modestly — a total inflation rate of +2.2%. The annualized rate of +0.27% per year was well below the historical average of roughly 3.3% per year.
Compare Other Periods
Starting from 1932:
Ending in 1940: