Between 1967 and 1981, the Consumer Price Index went from 33.4 to 90.9.
Cumulatively, prices increased 172.2%, which works out to an average of
7.41% per year. Put differently, a dollar in 1967 bought what
$0.37 buys in 1981.
Consumer prices rose 3.1% in 1967, up from 1966’s 2.9% as
Vietnam War spending kept climbing alongside expanding Great Society
programs, a combination of rising military and domestic outlays that
economists later blamed for entrenching inflation through the rest of the
decade. The minimum wage rose that February 1, to $1.40 an hour, the
first step of a phased increase Congress had set the year before. Urban
unrest reached a peak that July, when days of rioting left 26 dead in
Newark and 43 dead in Detroit, the deadliest of that summer’s roughly 160
disturbances; Johnson responded by forming the Kerner Commission to study
the causes of the unrest. The Supreme Court gained its first Black
justice that year too: the Senate confirmed Thurgood Marshall on August
30, and he was sworn in that October after serving as U.S. Solicitor
General and, before that, as the lead attorney in Brown v. Board of
Education. Consumer prices finished 1967 237.4% above their
1913 level. First-class postage held at 5 cents.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1967 spending costs in 1981, by category:
Category
Avg. yearly inflation
$100 in 1967 →
All items (CPI-U)
7.41%
$272
Energy
10.61%
$411
Medical care
8.01%
$294
Housing
7.99%
$294
Transportation
7.63%
$280
Food
7.48%
$274
Core (all items less food & energy)
6.98%
$257
Apparel
4.57%
$187
Not shown because the BLS began these indexes after 1967: recreation (1993–), education & communication (1993–).
1981 was the year the inflation fever finally broke, at an extraordinary price.
Consumer prices rose 10.3%, the second year of back-to-back double-digit
inflation and the last time the U.S. would see one. To end it, Paul Volcker’s
Federal Reserve drove its policy rate above 19% and let borrowing costs go
where they may: a 30-year mortgage cost more than 18% by autumn, car loans and
business credit froze, and homebuilders mailed the Fed two-by-fours in protest.
The squeeze tipped the economy into recession in July, the deep 1981–82
downturn that would push unemployment past 10%. But it worked. Inflation fell
by nearly half within a year and to under 4% by 1983, the disinflation that
defined the following two decades. Even the price of mailing a letter told the
year’s story: postage went up twice in eight months.
MLA: “Inflation from 1967 to 1981: $100 is worth $272 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1967-to-1981/
APA: InflationCalculator.com. Inflation from 1967 to 1981. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1967-to-1981/