U.S. inflation · 1979–1981
$100 in 1979 has the same buying power as
$125
in 1981
| Cumulative price change | 25.2% |
|---|---|
| Average inflation rate | 11.90% per year |
| Converted amount ($100 base) | $125 |
| Price difference ($100 base) | $25.21 |
| CPI in 1979 | 72.6 |
| CPI in 1981 | 90.9 |
| Inflation in 1979 | 11.35% |
| Inflation in 1981 | 10.32% |
| $100 in 1979 → 1981 | $125 |
| $100 in 1981 → 1979 | $79.87 |
Between 1979 and 1981, the Consumer Price Index went from 72.6 to 90.9. Cumulatively, prices increased 25.2%, which works out to an average of 11.90% per year. Put differently, a dollar in 1979 bought what $0.80 buys in 1981.
| Amount in 1979 | Value in 1981 |
|---|---|
| $1.00 | $1.25 |
| $5.00 | $6.26 |
| $10.00 | $12.52 |
| $20.00 | $25.04 |
| $50.00 | $62.60 |
| $100 | $125 |
| $500 | $626 |
| $1,000 | $1,252 |
| $5,000 | $6,260 |
| $10,000 | $12,521 |
| $100,000 | $125,207 |
| $1,000,000 | $1,252,066 |
The headline number is an average. Individual categories moved very differently over this period. Here is what $100 of 1979 spending costs in 1981, by category:
| Category | Avg. yearly inflation | $100 in 1979 → |
|---|---|---|
| All items (CPI-U) | 11.90% | $125 |
| Energy | 21.95% | $149 |
| Transportation | 14.98% | $132 |
| Housing | 13.56% | $129 |
| Core (all items less food & energy) | 11.38% | $124 |
| Medical care | 10.82% | $123 |
| Food | 8.23% | $117 |
| Apparel | 5.95% | $112 |
Not shown because the BLS began these indexes after 1979: recreation (1993–), education & communication (1993–).
| Year | CPI | Inflation rate | $100 from 1979 |
|---|---|---|---|
| 1979 | 72.6 | 11.3% | $100 |
| 1980 | 82.4 | 13.5% | $113 |
| 1981 | 90.9 | 10.3% | $125 |
1981 was the year the inflation fever finally broke, at an extraordinary price. Consumer prices rose 10.3%, the second year of back-to-back double-digit inflation and the last time the U.S. would see one. To end it, Paul Volcker’s Federal Reserve drove its policy rate above 19% and let borrowing costs go where they may: a 30-year mortgage cost more than 18% by autumn, car loans and business credit froze, and homebuilders mailed the Fed two-by-fours in protest. The squeeze tipped the economy into recession in July, the deep 1981–82 downturn that would push unemployment past 10%. But it worked. Inflation fell by nearly half within a year and to under 4% by 1983, the disinflation that defined the following two decades. Even the price of mailing a letter told the year’s story: postage went up twice in eight months.
MLA: “Inflation from 1979 to 1981: $100 is worth $125 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1979-to-1981/
APA: InflationCalculator.com. Inflation from 1979 to 1981. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1979-to-1981/
Source: U.S. Bureau of Labor Statistics, CPI-U annual averages (series CUUR0000SA0; category indexes listed on the data sources page). See how these numbers are calculated.