$100 in 1979 is worth $163 in 1988,
because prices increased 62.9% over that period, an average of
5.57% a year.
$100 in 1979 has
the same buying power as
$163
in 1988
Detailed inflation statistics
Cumulative price change
62.9%
Average inflation rate
5.57% per year
Converted amount ($100 base)
$163
Price difference ($100 base)
$62.95
CPI in 1979
72.6
CPI in 1988
118.3
Inflation in 1979
11.35%
Inflation in 1988
4.14%
$100 in 1979 → 1988
$163
$100 in 1988 → 1979
$61.37
What happened to prices between 1979 and 1988
Between 1979 and 1988, the Consumer Price Index went from 72.6 to 118.3.
Cumulatively, prices increased 62.9%, which works out to an average of
5.57% per year. Put differently, a dollar in 1979 bought what
$0.61 buys in 1988: the 1979 dollar
lost 38.6% of its purchasing power over
these 9 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 1988 at the same ratio, 1.63: $1,000 becomes
$1,629, and $10,000 becomes $16,295.
Amount in 1979
Value in 1988
$1.00
$1.63
$5.00
$8.15
$10.00
$16.29
$20.00
$32.59
$50.00
$81.47
$100
$163
$500
$815
$1,000
$1,629
$5,000
$8,147
$10,000
$16,295
$100,000
$162,948
$1,000,000
$1,629,477
Inflation by spending category, 1979–1988
Between 1979 and 1988, medical care rose the most, up 105.3%, while energy rose the least, up 35.9%, against 62.9% for all items. The headline number is an average; here is what $100 of 1979
spending costs in 1988, by category:
Category
Avg. yearly inflation
$100 in 1979 →
All items (CPI-U)
5.57%
$163
Medical care
8.32%
$205
Core (all items less food & energy)
6.19%
$172
Housing
6.01%
$169
Transportation
4.93%
$154
Food
4.45%
$148
Apparel
3.47%
$136
Energy
3.47%
$136
Not shown because the BLS began these indexes after 1979: recreation (1993–), education & communication (1993–).
Decade by decade: 1979 to 1988
Prices climbed fastest in the 1970s, averaging 13.50% a year, and slowest in the 1980s (4.62% a year). Each step below chains into the full 1979–1988 change:
Years
Avg. yearly inflation
Price change
$100 from 1979, at end
1979–1980
13.50%
13.5%
$113
1980–1988
4.62%
43.6%
$163
Year by year: CPI and the value of $100 from 1979
$100 from 1979 had already become $137 by
1983, on its way to $163 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 1979 had the buying
power of $163; 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 1979 to 1988: $100 is worth $163 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1979-to-1988/
APA: InflationCalculator.com. Inflation from 1979 to 1988. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1979-to-1988/