Between 1974 and 1990, the Consumer Price Index went from 49.3 to 130.7.
Cumulatively, prices increased 165.1%, which works out to an average of
6.28% per year. Put differently, a dollar in 1974 bought what
$0.38 buys in 1990.
1974 was the year the postwar economy broke its old rules. Consumer prices
rose 11.0%, the fastest annual increase since 1947, as the Arab oil embargo
that ran from October 1973 to March 1974 roughly quadrupled the price of
crude oil worldwide. Gasoline, which had averaged 38.5 cents a gallon in
1973, jumped to 53.2 cents, and shortages forced many states into odd-even
rationing at the pump. Nixon’s wage and price controls, in place in some form
since 1971, expired at the end of April, removing the last brake on prices
just as the oil shock hit. Nixon himself resigned in August over Watergate,
and Gerald Ford’s response to inflation, a voluntary “Whip Inflation Now”
campaign built around lapel buttons, became a symbol of how little
conventional politics could do against the problem. Prices kept climbing even
as the economy weakened: a recession that started in November 1973 dragged
on, the Dow fell to a bear-market bottom of 577.60 in December, and
unemployment was already rising toward the 9% it would reach in 1975. The
combination of rising prices and a shrinking economy gave the decade its
name: stagflation.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1974 spending costs in 1990, by category:
Category
Avg. yearly inflation
$100 in 1974 →
All items (CPI-U)
6.28%
$265
Medical care
8.77%
$384
Housing
6.66%
$281
Core (all items less food & energy)
6.51%
$274
Energy
6.35%
$268
Transportation
6.23%
$263
Food
5.63%
$240
Apparel
3.70%
$179
Not shown because the BLS began these indexes after 1974: recreation (1993–), education & communication (1993–).
In 1990, the median U.S. household earned about $29,900, gas averaged $1.15 a
gallon, and mailing a letter cost a quarter. Inflation ran hot at 5.4% for the
year, its highest rate since 1982, pushed up by an oil shock after Iraq’s
invasion of Kuwait, and the economy tipped into recession that summer. It was
the last gasp of elevated inflation before the long calm of the 1990s.
MLA: “Inflation from 1974 to 1990: $100 is worth $265 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1974-to-1990/
APA: InflationCalculator.com. Inflation from 1974 to 1990. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1974-to-1990/