$100 in 1978 is worth $165 in 1985,
because prices increased 65.0% over that period, an average of
7.42% a year.
$100 in 1978 has
the same buying power as
$165
in 1985
Detailed inflation statistics
Cumulative price change
65.0%
Average inflation rate
7.42% per year
Converted amount ($100 base)
$165
Price difference ($100 base)
$65.03
CPI in 1978
65.2
CPI in 1985
107.6
Inflation in 1978
7.59%
Inflation in 1985
3.56%
$100 in 1978 → 1985
$165
$100 in 1985 → 1978
$60.59
What happened to prices between 1978 and 1985
Between 1978 and 1985, the Consumer Price Index went from 65.2 to 107.6.
Cumulatively, prices increased 65.0%, which works out to an average of
7.42% per year. Put differently, a dollar in 1978 bought what
$0.61 buys in 1985: the 1978 dollar
lost 39.4% of its purchasing power over
these 7 years.
Consumer prices rose 7.6% in 1978, accelerating for a second straight year as
rising wages, a weakening dollar, and climbing energy costs outpaced the
Federal Reserve’s response. Fed chairman G. William Miller, appointed by
Carter that March, kept interest rates too low to slow the trend, a policy
later cited as one reason inflation kept building toward the following year’s
crisis. California voters responded to their own version of the problem that
June, passing Proposition 13 by nearly two to one to cap property tax rates
after years of rising home values had pushed tax bills up alongside them.
Foreign policy delivered one of the decade’s genuine breakthroughs: President
Carter brought Egyptian President Anwar Sadat and Israeli Prime Minister
Menachem Begin together for thirteen days of negotiations at Camp David that
September, producing a framework for peace between the two countries that was
signed as a treaty the following March. First-class postage rose to 15 cents
that May 29, a rate that would hold longer than any other in the decade. The
year ended in tragedy: cult leader Jim Jones directed the mass murder-suicide
of more than 900 followers at a remote settlement in Guyana that November 18.
A median household earned $15,064 in 1978, a new home sold for a median
$55,700, and gas averaged 63 cents a gallon. Consumer prices stood 558.6%
above their 1913 level, with the decade’s worst inflation
still to come.
Every 1978 amount converts to 1985 at the same ratio, 1.65: $1,000 becomes
$1,650, and $10,000 becomes $16,503.
Amount in 1978
Value in 1985
$1.00
$1.65
$5.00
$8.25
$10.00
$16.50
$20.00
$33.01
$50.00
$82.52
$100
$165
$500
$825
$1,000
$1,650
$5,000
$8,252
$10,000
$16,503
$100,000
$165,031
$1,000,000
$1,650,307
Inflation by spending category, 1978–1985
Between 1978 and 1985, energy rose the most, up 93.5%, while apparel rose the least, up 29.0%, against 65.0% for all items. The headline number is an average; here is what $100 of 1978
spending costs in 1985, by category:
Category
Avg. yearly inflation
$100 in 1978 →
All items (CPI-U)
7.42%
$165
Energy
9.89%
$194
Medical care
9.07%
$184
Housing
8.11%
$173
Transportation
8.10%
$172
Core (all items less food & energy)
7.56%
$167
Food
5.62%
$147
Apparel
3.70%
$129
Not shown because the BLS began these indexes after 1978: recreation (1993–), education & communication (1993–).
Decade by decade: 1978 to 1985
Prices climbed fastest in the 1970s, averaging 12.42% a year, and slowest in the 1980s (5.48% a year). Each step below chains into the full 1978–1985 change:
Years
Avg. yearly inflation
Price change
$100 from 1978, at end
1978–1980
12.42%
26.4%
$126
1980–1985
5.48%
30.6%
$165
Year by year: CPI and the value of $100 from 1978
$100 from 1978 had already become $139 by
1981, on its way to $165 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 1983.
In 1985, prices rose 3.6% and $100 from 1978 had the buying
power of $165; 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 1978 to 1985: $100 is worth $165 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1978-to-1985/
APA: InflationCalculator.com. Inflation from 1978 to 1985. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1978-to-1985/