$100 in 1978 is worth $181 in 1988,
because prices increased 81.4% over that period, an average of
6.14% a year.
$100 in 1978 has
the same buying power as
$181
in 1988
Detailed inflation statistics
Cumulative price change
81.4%
Average inflation rate
6.14% per year
Converted amount ($100 base)
$181
Price difference ($100 base)
$81.44
CPI in 1978
65.2
CPI in 1988
118.3
Inflation in 1978
7.59%
Inflation in 1988
4.14%
$100 in 1978 → 1988
$181
$100 in 1988 → 1978
$55.11
What happened to prices between 1978 and 1988
Between 1978 and 1988, the Consumer Price Index went from 65.2 to 118.3.
Cumulatively, prices increased 81.4%, which works out to an average of
6.14% per year. Put differently, a dollar in 1978 bought what
$0.55 buys in 1988: the 1978 dollar
lost 44.9% of its purchasing power over
these 10 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 1988 at the same ratio, 1.81: $1,000 becomes
$1,814, and $10,000 becomes $18,144.
Amount in 1978
Value in 1988
$1.00
$1.81
$5.00
$9.07
$10.00
$18.14
$20.00
$36.29
$50.00
$90.72
$100
$181
$500
$907
$1,000
$1,814
$5,000
$9,072
$10,000
$18,144
$100,000
$181,442
$1,000,000
$1,814,417
Inflation by spending category, 1978–1988
Between 1978 and 1988, medical care rose the most, up 124.3%, while apparel rose the least, up 41.8%, against 81.4% for all items. The headline number is an average; here is what $100 of 1978
spending costs in 1988, by category:
Category
Avg. yearly inflation
$100 in 1978 →
All items (CPI-U)
6.14%
$181
Medical care
8.41%
$224
Housing
6.62%
$190
Core (all items less food & energy)
6.54%
$188
Transportation
5.83%
$176
Energy
5.46%
$170
Food
5.08%
$164
Apparel
3.55%
$142
Not shown because the BLS began these indexes after 1978: recreation (1993–), education & communication (1993–).
Decade by decade: 1978 to 1988
Prices climbed fastest in the 1970s, averaging 12.42% a year, and slowest in the 1980s (4.62% a year). Each step below chains into the full 1978–1988 change:
Years
Avg. yearly inflation
Price change
$100 from 1978, at end
1978–1980
12.42%
26.4%
$126
1980–1988
4.62%
43.6%
$181
Year by year: CPI and the value of $100 from 1978
$100 from 1978 had already become $153 by
1983, on its way to $181 in 1988; 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 1.9% in 1986.
In 1988, prices rose 4.1% and $100 from 1978 had the buying
power of $181; the year's average CPI of 118.3 is the level
behind every 1988 figure on this page.
By 1988, the economic expansion that began in the ashes of the 1981-82
recession was in its sixth year, and the Federal Reserve was watching for
signs it had run too long. Inflation rose to 4.1%, up from 3.6% the year
before, while unemployment fell to its lowest level since 1974. Alan
Greenspan’s Fed responded by raising the federal funds rate through the
year, from about 6.5% to 8.5%, trying to cool demand before prices
accelerated the way they had in the 1970s. Households still felt the
difference between this expansion and the last one: gas held near 90 cents
a gallon, almost exactly its 1987 price, and median household income rose
to roughly $27,200. The one price that moved was postage, which rose from
22 to 25 cents in April, the fourth increase of the decade but a far
gentler pace than the string of increases in the late 1970s and early
1980s. In November, Vice President George H.W. Bush won the presidency on
the strength of the expansion, promising in his nomination speech to hold
the line on taxes. Both the boom and that pledge would run into trouble
within two years, as the Fed’s rate increases helped tip the economy toward
the 1990-91 recession.
MLA: “Inflation from 1978 to 1988: $100 is worth $181 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1978-to-1988/
APA: InflationCalculator.com. Inflation from 1978 to 1988. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1978-to-1988/