$100 in 1979 is worth $171 in 1989,
because prices increased 70.8% over that period, an average of
5.50% a year.
$100 in 1979 has
the same buying power as
$171
in 1989
Detailed inflation statistics
Cumulative price change
70.8%
Average inflation rate
5.50% per year
Converted amount ($100 base)
$171
Price difference ($100 base)
$70.80
CPI in 1979
72.6
CPI in 1989
124
Inflation in 1979
11.35%
Inflation in 1989
4.82%
$100 in 1979 → 1989
$171
$100 in 1989 → 1979
$58.55
What happened to prices between 1979 and 1989
Between 1979 and 1989, the Consumer Price Index went from 72.6 to 124.
Cumulatively, prices increased 70.8%, which works out to an average of
5.50% per year. Put differently, a dollar in 1979 bought what
$0.59 buys in 1989: the 1979 dollar
lost 41.5% of its purchasing power over
these 10 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 1989 at the same ratio, 1.71: $1,000 becomes
$1,708, and $10,000 becomes $17,080.
Amount in 1979
Value in 1989
$1.00
$1.71
$5.00
$8.54
$10.00
$17.08
$20.00
$34.16
$50.00
$85.40
$100
$171
$500
$854
$1,000
$1,708
$5,000
$8,540
$10,000
$17,080
$100,000
$170,799
$1,000,000
$1,707,989
Inflation by spending category, 1979–1989
Between 1979 and 1989, medical care rose the most, up 121.2%, while apparel rose the least, up 39.7%, against 70.8% for all items. The headline number is an average; here is what $100 of 1979
spending costs in 1989, by category:
Category
Avg. yearly inflation
$100 in 1979 →
All items (CPI-U)
5.50%
$171
Medical care
8.26%
$221
Core (all items less food & energy)
6.02%
$179
Housing
5.78%
$175
Transportation
4.93%
$162
Food
4.59%
$157
Energy
3.68%
$144
Apparel
3.40%
$140
Not shown because the BLS began these indexes after 1979: recreation (1993–), education & communication (1993–).
Decade by decade: 1979 to 1989
Prices climbed fastest in the 1970s, averaging 13.50% a year, and slowest in the 1980s (4.65% a year). Each step below chains into the full 1979–1989 change:
Years
Avg. yearly inflation
Price change
$100 from 1979, at end
1979–1980
13.50%
13.5%
$113
1980–1989
4.65%
50.5%
$171
Year by year: CPI and the value of $100 from 1979
$100 from 1979 had already become $143 by
1984, on its way to $171 in 1989; 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 1989, prices rose 4.8% and $100 from 1979 had the buying
power of $171; the year's average CPI of 124 is the level
behind every 1989 figure on this page.
1989 closed out a decade that began in economic crisis and ended in a long,
calmer expansion. Inflation for the year came in at 4.8%, higher than the
mid-decade lull but still roughly a third of the 13.5% peak that had opened
the decade in 1980. The federal minimum wage, unchanged at $3.35 an hour
since January 1981, had gone longer without an increase than at any point
since Congress created it, and had lost close to a third of its purchasing
power to inflation in the meantime; lawmakers would finally raise it to
$3.80 the following April. The decade’s other unfinished business came due
in August, when Congress passed FIRREA, the law that created the Resolution
Trust Corporation to seize and sell off the hundreds of savings and loan
institutions that a decade of deregulation and risky lending had left
insolvent, a bailout that eventually cost taxpayers over $100 billion. On
Wall Street, the recovery was already complete: the Dow Jones Industrial
Average closed 1989 at a record high, just over two years after Black
Monday’s 22.6% single-day crash, capping the bull market that had begun at
the Dow’s 776 low in August 1982. Between the S&L bailout, a wage floor
eroded by years without a raise, and a stock market at new highs, 1989
captured how unevenly the decade’s disinflation had been felt.
MLA: “Inflation from 1979 to 1989: $100 is worth $171 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1979-to-1989/
APA: InflationCalculator.com. Inflation from 1979 to 1989. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1979-to-1989/