$100 in 1971 is worth $266 in 1985,
because prices increased 165.7% over that period, an average of
7.23% a year.
$100 in 1971 has
the same buying power as
$266
in 1985
Detailed inflation statistics
Cumulative price change
165.7%
Average inflation rate
7.23% per year
Converted amount ($100 base)
$266
Price difference ($100 base)
$166
CPI in 1971
40.5
CPI in 1985
107.6
Inflation in 1971
4.38%
Inflation in 1985
3.56%
$100 in 1971 → 1985
$266
$100 in 1985 → 1971
$37.64
What happened to prices between 1971 and 1985
Between 1971 and 1985, the Consumer Price Index went from 40.5 to 107.6.
Cumulatively, prices increased 165.7%, which works out to an average of
7.23% per year. Put differently, a dollar in 1971 bought what
$0.38 buys in 1985: the 1971 dollar
lost 62.4% of its purchasing power over
these 14 years.
Consumer prices rose 4.4% in 1971, down from 1970’s 5.7% as
the recession that started in December 1969 finally cooled demand. The bigger
economic story came that August 15, when President Nixon closed the “gold
window” that let foreign governments exchange dollars for gold, ending the
Bretton Woods system that had anchored the dollar since World War II. The
same address announced a 90-day freeze on wages and prices, the first
peacetime controls the country had seen, an attempt to break inflationary
expectations without the slower grind of tighter money. The “Nixon Shock,” as
it came to be known, let the dollar float against other currencies for the
first time and set the stage for a wage-and-price-control regime that would
run in various forms into 1973. Politically, the country lowered its voting
age that year: the 26th Amendment, ratified July 1, extended the vote to
18-year-olds, capping a campaign built on the argument that men old enough to
be drafted to Vietnam were old enough to vote for the people who sent them.
The Postal Service, independent since 1970’s reorganization, raised
first-class postage from 6 to 8 cents that May. A median household earned
$9,028 in 1971, up from $8,734 the year before, while gas held near 36 cents
a gallon and a new home sold for a median $25,200. Consumer prices stood
309.1% above their 1913 level by year’s end, still years away
from the double-digit inflation the controls were meant to prevent.
Every 1971 amount converts to 1985 at the same ratio, 2.66: $1,000 becomes
$2,657, and $10,000 becomes $26,568.
Amount in 1971
Value in 1985
$1.00
$2.66
$5.00
$13.28
$10.00
$26.57
$20.00
$53.14
$50.00
$133
$100
$266
$500
$1,328
$1,000
$2,657
$5,000
$13,284
$10,000
$26,568
$100,000
$265,679
$1,000,000
$2,656,790
Inflation by spending category, 1971–1985
Between 1971 and 1985, energy rose the most, up 283.4%, while apparel rose the least, up 71.8%, against 165.7% for all items. The headline number is an average; here is what $100 of 1971
spending costs in 1985, by category:
Category
Avg. yearly inflation
$100 in 1971 →
All items (CPI-U)
7.23%
$266
Energy
10.08%
$383
Medical care
8.53%
$314
Housing
7.73%
$283
Transportation
7.33%
$269
Food
7.10%
$261
Core (all items less food & energy)
6.93%
$256
Apparel
3.94%
$172
Not shown because the BLS began these indexes after 1971: recreation (1993–), education & communication (1993–).
Decade by decade: 1971 to 1985
Prices climbed fastest in the 1970s, averaging 8.21% a year, and slowest in the 1980s (5.48% a year). Each step below chains into the full 1971–1985 change:
Years
Avg. yearly inflation
Price change
$100 from 1971, at end
1971–1980
8.21%
103.5%
$203
1980–1985
5.48%
30.6%
$266
Year by year: CPI and the value of $100 from 1971
$100 from 1971 had already become $161 by
1978, on its way to $266 in 1985; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 13.5% in 1980, and the smallest rise was 3.2% in 1972.
In 1985, prices rose 3.6% and $100 from 1971 had the buying
power of $266; the year's average CPI of 107.6 is the level
behind every 1985 figure on this page.
By 1985, low inflation had become the norm rather than the exception.
Consumer prices rose 3.6% for the year, the fourth straight year in the
3-6% range following the double-digit spikes of 1980 and 1981, proof that
the disinflation had held rather than merely paused, as it had after
previous recessions. Overseas, the dollar had become a problem of its own:
years of high U.S. interest rates had pulled in foreign capital and pushed
the dollar’s value up so far that American exporters were losing business
abroad, widening the trade deficit. In September, the finance ministers of
the U.S., Japan, West Germany, France, and the United Kingdom met at New
York’s Plaza Hotel and agreed to coordinate a managed decline of the
dollar; it fell roughly 25% against major currencies over the following two
years. At home, Congress responded to a federal deficit that had roughly
tripled since 1980 by passing the Gramm-Rudman-Hollings Act in December,
setting binding targets to shrink the deficit with automatic
across-the-board cuts if lawmakers missed them. Households felt the calmer
economy in small ways: first-class postage rose to 22 cents in February,
its first increase since November 1981, after nearly four years at 20
cents.
MLA: “Inflation from 1971 to 1985: $100 is worth $266 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1971-to-1985/
APA: InflationCalculator.com. Inflation from 1971 to 1985. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1971-to-1985/