U.S. inflation rate in 1950: 1.26%

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Inflation in 1950 and Its Effect on Dollar Value

Purchasing power decreased by 1.26% in 1950 compared to the previous year, 1949. On average, you would have to spend 1.26% more money in 1950 than in 1949 for the same item.

In other words, $1 in 1949 is equivalent in purchasing power to $1.01 in 1950.

The 1949 inflation rate was -1.24%. The inflation rate in 1950 was 1.26%. The 1950 inflation rate is lower compared to the average inflation rate of 3.51% per year between 1950 and 2018.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1950 was 24.1. It was 23.8 in the previous year, 1949. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.


Inflation from 1949 to 1950
Average inflation rate 1.26%
Converted amount ($1 base) $1.01
Price difference ($1 base) $0.01
CPI in 1949 23.800
CPI in 1950 24.100
Inflation in 1949 -1.24%
Inflation in 1950 1.26%


U.S. Inflation since 1913
Annual Rate, U.S. Bureau of Labor Statistics CPI

Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1949 to 1950 (figures shown are purchasing power equivalents of $1):

Houston, Texas experienced the highest rate of inflation during the 1 years between 1949 and 1950 (3.01%).

San Francisco, California experienced the lowest rate of inflation during the 1 years between 1949 and 1950 (-0.53%).

Note that some locations showing 0% inflation may have not yet reported latest data.


Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £1.00 in 1949 would be equivalent to £1.03 in 1950, an absolute change of £0.03 and a cumulative change of 3.13%.

In Canada, CA$1.00 in 1949 would be equivalent to CA$1.06 in 1950, an absolute change of CA$0.06 and a cumulative change of 5.74%.

Compare these numbers to the US's overall absolute change of $0.01 and total percent change of 1.26%.


Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. This chart shows the average rate of inflation for select CPI categories between 1949 and 1950.

Compare these values to the overall average of 1.26% per year:

Category Avg Inflation (%) Total Inflation (%) $1 in 1949 → 1950
Food 1.32 1.32 1.01
Shelter 0.00 0.00 1.00
Energy 0.00 0.00 1.00
Apparel -1.34 -1.34 0.99
New vehicles 0.00 0.00 1.00
Used cars and trucks 0.00 0.00 1.00
Transportation services 0.00 0.00 1.00
Medical care services 2.39 2.39 1.02
Medical care commodities 0.00 0.00 1.00

It's important to note that not all categories may be tracked since 1949. This table and visualization use the earliest available data for each category.



How to Calculate Inflation Rate for $1, 1949 to 1950

This inflation calculator uses the following inflation rate formula:

CPI in 1950CPI in 1949
×
1949 USD value
=
1950 USD value

Then plug in historical CPI values. The U.S. CPI was 23.8 in the year 1949 and 24.1 in 1950:

24.123.8
×
$1
=
$1.01

$1 in 1949 has the same "purchasing power" or "buying power" as $1.01 in 1950.

To get the total inflation rate for the 1 years between 1949 and 1950, we use the following formula:

CPI in 1950 - CPI in 1949CPI in 1949
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

24.1 - 23.823.8
×
100
=
1%

Comparison to S&P 500 Index

To help put this inflation into perspective, if we had invested $1 in the S&P 500 index in 1949, our investment would be nominally worth approximately $1.58 in 1950. This is a return on investment of 57.88%, with an absolute return of $0.58.

These numbers are not inflation adjusted, so they are considered nominal. In order to evaluate the real return on our investment, we must calculate the return with inflation taken into account.

The compounding effect of inflation would account for 1.24% of returns ($0.01) during this period. This means the inflation-adjusted real return of our $1 investment is $0.57.

Investment in S&P 500 Index, 1949-1950
Original Amount Final Amount Change
Nominal $1 $1.58 57.88%
Real
Inflation Adjusted
$1 $0.57 57.16%


News headlines from 1949

Politics and news often influence economic performance. Here's what was happening at the time:

  • David Ben-Gurion's Mapai party wins the first Israeli election.
  • The Federal Republic of Germany, or West Germany, is created by the combination of the American, British, and French occupation zones.
  • The Soviet Union ends the blockade of Berlin.
  • The People's Republic of China is proclaimed by Chinese Communist leaders.

Data Source & Citation

Raw data for these calculations comes from the Bureau of Labor Statistics' (CPI), established in 1913. Inflation data from 1665 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University.

You may use the following MLA citation for this page: “Inflation Rate in 1950 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 12 Dec. 2018, https://www.officialdata.org/inflation-rate-in-1950.

in2013dollars.com is a reference website maintained by the Official Data Foundation.


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