Value of $100 in 1979, adjusted to 2023

What happened to prices between 1979 and 2023

Between 1979 and 2023, the Consumer Price Index went from 72.6 to 304.702. Cumulatively, prices increased 319.7%, which works out to an average of 3.31% per year. Put differently, a dollar in 1979 bought what $0.24 buys in 2023: the 1979 dollar lost 76.2% of its purchasing power over these 44 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.

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The destination year: 2023

In 2023, prices rose 4.1% and $100 from 1979 had the buying power of $420; the year's average CPI of 304.702 is the level behind every 2023 figure on this page.

2023 was the year inflation came down without a recession. Consumer prices rose 4.1% on average, roughly half of 2022’s 8.0%, and the December-to-December rate fell to 3.4%. Gasoline averaged $3.52 a gallon, well below the 2022 average, and supply-chain pressure on goods eased. Shelter, restaurant meals, and other services stayed expensive, so the CPI kept rising at a rate well above the pre-pandemic pace.

The Federal Reserve completed its rate-hiking campaign in July, taking the policy rate to 5.25–5.50%, the highest level in 22 years. The effects showed up in banking: Silicon Valley Bank failed in March after rate increases eroded the value of its bond portfolio, the second-largest bank failure in U.S. history at the time. Despite that, unemployment stayed under 4% all year.

Median household income was $80,610 according to the Census Bureau. The federal minimum wage stayed at $7.25, and a first-class stamp rose to 66 cents in July.

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