$100 in 1979 is worth $225 in 1998,
because prices increased 124.5% over that period, an average of
4.35% a year.
$100 in 1979 has
the same buying power as
$225
in 1998
Detailed inflation statistics
Cumulative price change
124.5%
Average inflation rate
4.35% per year
Converted amount ($100 base)
$225
Price difference ($100 base)
$125
CPI in 1979
72.6
CPI in 1998
163
Inflation in 1979
11.35%
Inflation in 1998
1.56%
$100 in 1979 → 1998
$225
$100 in 1998 → 1979
$44.54
What happened to prices between 1979 and 1998
Between 1979 and 1998, the Consumer Price Index went from 72.6 to 163.
Cumulatively, prices increased 124.5%, which works out to an average of
4.35% per year. Put differently, a dollar in 1979 bought what
$0.45 buys in 1998: the 1979 dollar
lost 55.5% of its purchasing power over
these 19 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 1998 at the same ratio, 2.25: $1,000 becomes
$2,245, and $10,000 becomes $22,452.
Amount in 1979
Value in 1998
$1.00
$2.25
$5.00
$11.23
$10.00
$22.45
$20.00
$44.90
$50.00
$112
$100
$225
$500
$1,123
$1,000
$2,245
$5,000
$11,226
$10,000
$22,452
$100,000
$224,518
$1,000,000
$2,245,179
Inflation by spending category, 1979–1998
Between 1979 and 1998, medical care rose the most, up 258.7%, while energy rose the least, up 56.6%, against 124.5% for all items. The headline number is an average; here is what $100 of 1979
spending costs in 1998, by category:
Category
Avg. yearly inflation
$100 in 1979 →
All items (CPI-U)
4.35%
$225
Medical care
6.95%
$359
Core (all items less food & energy)
4.74%
$241
Housing
4.45%
$229
Food
3.75%
$201
Transportation
3.74%
$201
Apparel
2.39%
$157
Energy
2.39%
$157
Not shown because the BLS began these indexes after 1979: recreation (1993–), education & communication (1993–).
Decade by decade: 1979 to 1998
Prices climbed fastest in the 1970s, averaging 13.50% a year, and slowest in the 1990s (2.80% a year). Each step below chains into the full 1979–1998 change:
Years
Avg. yearly inflation
Price change
$100 from 1979, at end
1979–1980
13.50%
13.5%
$113
1980–1990
4.72%
58.6%
$180
1990–1998
2.80%
24.7%
$225
Year by year: CPI and the value of $100 from 1979
$100 from 1979 had already become $163 by
1988, on its way to $225 in 1998; 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 1.6% in 1998.
In 1998, prices rose 1.6% and $100 from 1979 had the buying
power of $225; the year's average CPI of 163 is the level
behind every 1998 figure on this page.
The median household earned about $38,900 in 1998, gas averaged just $1.06 a gallon, its
cheapest of the decade, and a new home cost roughly $152,500. Inflation ran at 1.6% for the
year, the lowest of the 1990s, as a glut of crude oil, worsened by weak demand from Asia’s
slowdown, pushed prices below $11 a barrel by December and pulled pump prices down with them.
The calm at home came alongside real turmoil abroad: in August, Russia devalued the ruble and
defaulted on its domestic debt, rattling markets already unsettled by the Asian financial
crisis, and in September the hedge fund Long-Term Capital Management collapsed after its highly
leveraged bets went bad, prompting the Federal Reserve to organize a private-sector bailout by
more than a dozen banks to prevent a disorderly unwinding of its roughly $100 billion in
positions. The Fed also cut interest rates three times that fall, in September, October, and
November, an insurance policy against the global financial turmoil spreading to the U.S.
economy. Cheap oil and a well-timed set of rate cuts left 1998 as a year the U.S. economy
absorbed two foreign financial crises without much of a dent at home.
MLA: “Inflation from 1979 to 1998: $100 is worth $225 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1979-to-1998/
APA: InflationCalculator.com. Inflation from 1979 to 1998. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1979-to-1998/