\$

# U.S. inflation rate in 1960: 1.72%

### Inflation in 1960 and Its Effect on Dollar Value

Purchasing power decreased by 1.72% in 1960 compared to 1959. On average, you would have to spend 1.72% more money in 1960 than in 1959 for the same item.

In other words, \$1 in 1959 is equivalent in purchasing power to about \$1.02 in 1960.

The 1959 inflation rate was 0.69%. The inflation rate in 1960 was 1.72%. The 1960 inflation rate is lower compared to the average inflation rate of 3.67% per year between 1960 and 2020.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1960 was 29.60. It was 29.10 in the previous year, 1959. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.

 Average inflation rate 1.72% Converted amount (\$1 base) \$1.02 Price difference (\$1 base) \$0.02 CPI in 1959 29.100 CPI in 1960 29.600 Inflation in 1959 0.69% Inflation in 1960 1.72%

USD Inflation since 1913
Annual Rate, the 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 1959 to 1960 (figures shown are purchasing power equivalents of \$1):

San Francisco, California experienced the highest rate of inflation during the 1 years between 1959 and 1960 (2.06%).

Detroit, Michigan experienced the lowest rate of inflation during the 1 years between 1959 and 1960 (0.82%).

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 1959 would be equivalent to £1.01 in 1960, an absolute change of £0.01 and a cumulative change of 1.03%.

In Canada, CA\$1.00 in 1959 would be equivalent to CA\$1.01 in 1960, an absolute change of CA\$0.01 and a cumulative change of 1.29%.

Compare these numbers to the US's overall absolute change of \$0.02 and total percent change of 1.72%.

### 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 1959 and 1960.

Compare these values to the overall average of 1.72% per year:

Category Avg Inflation (%) Total Inflation (%) \$1 in 1959 → 1960
Food and beverages 0.00 0.00 1.00
Housing 0.00 0.00 1.00
Apparel 1.50 1.50 1.02
Transportation -0.03 -0.03 1.00
Medical care 3.57 3.57 1.04
Recreation 0.00 0.00 1.00
Education and communication 0.00 0.00 1.00
Other goods and services 0.00 0.00 1.00

For all these visualizations, it's important to note that not all categories may have been tracked since 1959. This table and charts use the earliest available data for each category.

### How to Calculate Inflation Rate for \$1, 1959 to 1960

This inflation calculator uses the following inflation rate formula:

CPI in 1960CPI in 1959
×
1959 USD value
=
1960 USD value

Then plug in historical CPI values. The U.S. CPI was 29.1 in the year 1959 and 29.6 in 1960:

29.629.1
×
\$1
=
\$1.02

\$1 in 1959 has the same "purchasing power" or "buying power" as \$1.02 in 1960.

To get the total inflation rate for the 1 years between 1959 and 1960, we use the following formula:

CPI in 1960 - CPI in 1959CPI in 1959
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

29.6 - 29.129.1
×
100
=
2%

### Alternate Measurements of Inflation

The above data describe the CPI for all items. Also of note is the Core CPI, which measures inflation for all items except for the more volatile categories of food and energy. Core inflation averaged 1.50% per year between 1959 and 1960 (vs all-CPI inflation of 1.72%), for an inflation total of 1.50%.

When using the core inflation measurement, \$1 in 1959 is equivalent in buying power to \$1.02 in 1960, a difference of \$0.02. Recall that for All Items, the converted amount is \$1.02 with a difference of \$0.02.

In 1959, core inflation was 2.00%.

### 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 1959, our investment would be nominally worth approximately \$1.15 in 1960. This is a return on investment of 14.66%, with an absolute return of \$0.15 on top of the original \$1.

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 1.69% of returns (\$0.02) during this period. This means the inflation-adjusted real return of our \$1 investment is \$0.13. You may also want to account for capital gains tax, which would take your real return down to around \$0 for most people.

Investment in S&P 500 Index, 1959-1960
Original Amount Final Amount Change
Nominal \$1 \$1.15 14.66%
Real
\$1 \$1.13 12.72%

Information displayed above may differ slightly from other S&P 500 calculators. Minor discrepancies can occur because we use the latest CPI data for inflation, annualized inflation numbers for previous years, and we compute S&P price and dividends from January of 1959 to latest available data for 1960 using average monthly close price.

For more details on the S&P 500 between 1959 and 1960, see the stock market returns calculator.

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

• Hawaii becomes the 50th state of the United States of America.
• Luna I is the first spacecraft to leave the Earth's gravity.
• Fidel Castro becomes the 16th Prime Minister of Cuba after overthrowing Batista.
• The Dalai Lama flees China after India grants him political asylum.

### 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 1960 | Inflation Calculator.” Official Inflation Data, Alioth Finance, 27 Jan. 2020, https://www.officialdata.org/inflation-rate-in-1960.