U.S. inflation · 1971–1981
$100 in 1971 has the same buying power as
$224
in 1981
| Cumulative price change | 124.4% |
|---|---|
| Average inflation rate | 8.42% per year |
| Converted amount ($100 base) | $224 |
| Price difference ($100 base) | $124 |
| CPI in 1971 | 40.5 |
| CPI in 1981 | 90.9 |
| Inflation in 1971 | 4.38% |
| Inflation in 1981 | 10.32% |
| $100 in 1971 → 1981 | $224 |
| $100 in 1981 → 1971 | $44.55 |
Between 1971 and 1981, the Consumer Price Index went from 40.5 to 90.9. Cumulatively, prices increased 124.4%, which works out to an average of 8.42% per year. Put differently, a dollar in 1971 bought what $0.45 buys in 1981.
| Amount in 1971 | Value in 1981 |
|---|---|
| $1.00 | $2.24 |
| $5.00 | $11.22 |
| $10.00 | $22.44 |
| $20.00 | $44.89 |
| $50.00 | $112 |
| $100 | $224 |
| $500 | $1,122 |
| $1,000 | $2,244 |
| $5,000 | $11,222 |
| $10,000 | $22,444 |
| $100,000 | $224,444 |
| $1,000,000 | $2,244,444 |
The headline number is an average. Individual categories moved very differently over this period. Here is what $100 of 1971 spending costs in 1981, by category:
| Category | Avg. yearly inflation | $100 in 1971 → |
|---|---|---|
| All items (CPI-U) | 8.42% | $224 |
| Energy | 13.94% | $369 |
| Housing | 9.05% | $238 |
| Transportation | 8.96% | $236 |
| Food | 8.77% | $232 |
| Medical care | 8.67% | $230 |
| Core (all items less food & energy) | 7.64% | $209 |
| Apparel | 4.55% | $156 |
Not shown because the BLS began these indexes after 1971: recreation (1993–), education & communication (1993–).
| Year | CPI | Inflation rate | $100 from 1971 |
|---|---|---|---|
| 1971 | 40.5 | 4.4% | $100 |
| 1972 | 41.8 | 3.2% | $103 |
| 1973 | 44.4 | 6.2% | $110 |
| 1974 | 49.3 | 11.0% | $122 |
| 1975 | 53.8 | 9.1% | $133 |
| 1976 | 56.9 | 5.8% | $140 |
| 1977 | 60.6 | 6.5% | $150 |
| 1978 | 65.2 | 7.6% | $161 |
| 1979 | 72.6 | 11.3% | $179 |
| 1980 | 82.4 | 13.5% | $203 |
| 1981 | 90.9 | 10.3% | $224 |
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 1971 to 1981: $100 is worth $224 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1971-to-1981/
APA: InflationCalculator.com. Inflation from 1971 to 1981. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1971-to-1981/
Source: U.S. Bureau of Labor Statistics, CPI-U annual averages (series CUUR0000SA0; category indexes listed on the data sources page). See how these numbers are calculated.