Between 1977 and 2021, the Consumer Price Index went from 60.6 to 270.97.
Cumulatively, prices increased 347.1%, which works out to an average of
3.46% per year. Put differently, a dollar in 1977 bought what
$0.22 buys in 2021.
Consumer prices rose 6.5% in 1977, ticking back up from 1976’s
5.8% as the economic recovery strengthened, wages climbed, and energy costs
pushed higher again. The year opened with a warning about that energy
dependence: record cold across the Midwest and Northeast in January and
February strained natural gas supplies so badly that schools and factories in
several states shut down for days to conserve fuel. Jimmy Carter, inaugurated
that January, made energy policy a centerpiece of his presidency, and
Congress created the cabinet-level Department of Energy that August to
consolidate programs built up piecemeal since the 1973 oil embargo. Culture
offered some relief from the anxiety: released that May, Star Wars became the
highest-grossing film in history to that point, drawing lines around theater
blocks for months. The year also closed an era in a different way. Elvis
Presley was found dead at his Graceland home on August 16 at age 42, drawing
tens of thousands of mourners to Memphis. A median household earned $13,572
in 1977, a new home sold for a median $48,800, and gas averaged 62 cents a
gallon. Consumer prices stood 512.1% above their 1913 level,
with the energy anxieties of the year setting up the harder shocks of 1978
and 1979.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1977 spending costs in 2021, by category:
Category
Avg. yearly inflation
$100 in 1977 →
All items (CPI-U)
3.46%
$447
Medical care
5.18%
$922
Housing
3.67%
$489
Energy
3.64%
$482
Core (all items less food & energy)
3.50%
$455
Food
3.34%
$424
Transportation
3.15%
$391
Apparel
0.99%
$154
Not shown because the BLS began these indexes after 1977: recreation (1993–), education & communication (1993–).
Long periods are sampled every 2 years; the calculator above covers any pair of years.
The destination year: 2021
2021 was the year inflation stopped being background noise. Consumer prices
rose 4.7% on average for the year, and the pace kept building as the months
went on: by December, the 12-month rate had reached 7.0%, the highest since
1982. The proximate cause was a supply chain that could not keep up with a
fast-reopening economy. A global semiconductor shortage choked new car
production and pushed used vehicle prices up by more than a third, the
single largest line item in the year’s inflation math. Lumber, appliances,
and shipping capacity told versions of the same story: demand snapped back
faster than factories, ports, and truckers could handle it. Washington added
fuel in March with the $1.9 trillion American Rescue Plan, on top of the
relief already in the pipeline since 2020. For most of the year, the Federal
Reserve called the price surge “transitory,” a temporary reopening effect
expected to fade on its own, and held its policy rate near zero. By
November, with inflation still climbing, the Fed reversed course and began
winding down its bond purchases, the first step toward the rate hikes that
would follow in 2022. Gas averaged $3.01 a gallon for the year, up from
about $2.17 in 2020, while the federal minimum wage held at $7.25,
unchanged since 2009. In hindsight, 2021 reads as the hinge year: the point
where “transitory” inflation became the multi-year fight the Fed spent the
next two years trying to win.
MLA: “Inflation from 1977 to 2021: $100 is worth $447 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1977-to-2021/
APA: InflationCalculator.com. Inflation from 1977 to 2021. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1977-to-2021/