$100 in 1979 is worth $148 in 1985,
because prices increased 48.2% over that period, an average of
6.78% a year.
$100 in 1979 has
the same buying power as
$148
in 1985
Detailed inflation statistics
Cumulative price change
48.2%
Average inflation rate
6.78% per year
Converted amount ($100 base)
$148
Price difference ($100 base)
$48.21
CPI in 1979
72.6
CPI in 1985
107.6
Inflation in 1979
11.35%
Inflation in 1985
3.56%
$100 in 1979 → 1985
$148
$100 in 1985 → 1979
$67.47
What happened to prices between 1979 and 1985
Between 1979 and 1985, the Consumer Price Index went from 72.6 to 107.6.
Cumulatively, prices increased 48.2%, which works out to an average of
6.78% per year. Put differently, a dollar in 1979 bought what
$0.67 buys in 1985: the 1979 dollar
lost 32.5% of its purchasing power over
these 6 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 1985 at the same ratio, 1.48: $1,000 becomes
$1,482, and $10,000 becomes $14,821.
Amount in 1979
Value in 1985
$1.00
$1.48
$5.00
$7.41
$10.00
$14.82
$20.00
$29.64
$50.00
$74.10
$100
$148
$500
$741
$1,000
$1,482
$5,000
$7,410
$10,000
$14,821
$100,000
$148,209
$1,000,000
$1,482,094
Inflation by spending category, 1979–1985
Between 1979 and 1985, medical care rose the most, up 68.1%, while apparel rose the least, up 23.7%, against 48.2% for all items. The headline number is an average; here is what $100 of 1979
spending costs in 1985, by category:
Category
Avg. yearly inflation
$100 in 1979 →
All items (CPI-U)
6.78%
$148
Medical care
9.05%
$168
Energy
7.54%
$155
Housing
7.42%
$154
Core (all items less food & energy)
7.20%
$152
Transportation
7.10%
$151
Food
4.76%
$132
Apparel
3.60%
$124
Not shown because the BLS began these indexes after 1979: recreation (1993–), education & communication (1993–).
Decade by decade: 1979 to 1985
Prices climbed fastest in the 1970s, averaging 13.50% a year, and slowest in the 1980s (5.48% a year). Each step below chains into the full 1979–1985 change:
Years
Avg. yearly inflation
Price change
$100 from 1979, at end
1979–1980
13.50%
13.5%
$113
1980–1985
5.48%
30.6%
$148
Year by year: CPI and the value of $100 from 1979
$100 from 1979 had already become $133 by
1982, on its way to $148 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 1979 had the buying
power of $148; 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 1979 to 1985: $100 is worth $148 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1979-to-1985/
APA: InflationCalculator.com. Inflation from 1979 to 1985. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1979-to-1985/