$100 in 1979 is worth $125 in 1981,
because prices increased 25.2% over that period, an average of
11.90% a year.
$100 in 1979 has
the same buying power as
$125
in 1981
Detailed inflation statistics
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
What happened to prices between 1979 and 1981
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: the 1979 dollar
lost 20.1% of its purchasing power over
these 2 years.
Consumer prices rose 11.3% in 1979, the fastest pace since 1947 and the
decade’s second bout of double-digit inflation after 1974’s
11.0%. The trigger was familiar: the Iranian Revolution that January halted
Iran’s oil exports, and panic buying amplified the shortage, sending crude
prices sharply higher over the year and motorists back into gas lines, with
some states reviving the odd-even rationing last seen in 1974. Paul Volcker,
appointed Federal Reserve chairman that August, responded with a strategy
shift announced that October: the Fed would target the money supply directly
and let interest rates rise as high as necessary to break inflation, whatever
the short-term cost. That cost would arrive as a deep recession in 1981-82,
but by year’s end 1979 had already delivered enough turmoil on its own. A
reactor at the Three Mile Island plant near Harrisburg, Pennsylvania,
suffered a partial core meltdown that March 28, the worst commercial nuclear
accident in U.S. history, and on November 4, militants in Tehran stormed the
U.S. embassy and took 52 Americans hostage, beginning a 444-day crisis that
consumed the rest of Carter’s presidency. A median household earned $16,461
in 1979, a new home sold for a median $62,900, and gas jumped to 86 cents a
gallon. Consumer prices finished the decade 97.8% above where they stood in
1969, very nearly doubling in ten years, and stood 633.3%
above their 1913 level. The 1970s had opened with inflation
cooling from the 1969 spike and closed with prices rising faster than at any
point since 1947, setting up the Great
Inflation’s final act in 1980.
Every 1979 amount converts to 1981 at the same ratio, 1.25: $1,000 becomes
$1,252, and $10,000 becomes $12,521.
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
Inflation by spending category, 1979–1981
Between 1979 and 1981, energy rose the most, up 48.7%, while apparel rose the least, up 12.2%, against 25.2% for all items. The headline number is an average; 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–).
Decade by decade: 1979 to 1981
Prices climbed fastest in the 1970s, averaging 13.50% a year, and slowest in the 1980s (10.32% a year). Each step below chains into the full 1979–1981 change:
Years
Avg. yearly inflation
Price change
$100 from 1979, at end
1979–1980
13.50%
13.5%
$113
1980–1981
10.32%
10.3%
$125
Year by year: CPI and the value of $100 from 1979
$100 from 1979 had already become $113 by
1980, on its way to $125 in 1981; 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 10.3% in 1981.
In 1981, prices rose 10.3% and $100 from 1979 had the buying
power of $125; the year's average CPI of 90.9 is the level
behind every 1981 figure on this page.
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/