Between 1980 and 2009, the Consumer Price Index went from 82.4 to 214.537.
Cumulatively, prices increased 160.4%, which works out to an average of
3.35% per year. Put differently, a dollar in 1980 bought what
$0.38 buys in 2009.
1980 sat at the very peak of the Great Inflation. Prices rose 13.5% in that
single year, mortgage rates were climbing toward 16%, and the Federal Reserve
under Paul Volcker was administering the painful interest-rate medicine that
would finally break the inflationary spiral, at the cost of the deep 1981–82
recession. No single year looms larger in how Americans think about inflation.
The headline number is an average. Individual categories moved very differently over this
period. Here is what $100 of 1980 spending costs in 2009, by category:
Category
Avg. yearly inflation
$100 in 1980 →
All items (CPI-U)
3.35%
$260
Medical care
5.72%
$501
Core (all items less food & energy)
3.50%
$271
Housing
3.45%
$268
Food
3.23%
$251
Energy
2.83%
$225
Transportation
2.69%
$216
Apparel
0.96%
$132
Not shown because the BLS began these indexes after 1980: recreation (1993–), education & communication (1993–).
2009 is the rarest kind of year in the modern price data: one where the cost
of living went down. The CPI fell 0.4%, the first full-year deflation
since 1955, as the Great Recession hollowed out demand and oil unwound from
its $147 spike the summer before. Gasoline that had cost over $4 a gallon in
July 2008 averaged $2.35 in 2009, and that energy collapse dragged the
12-month inflation rate to −2.1% by July, the deepest reading since 1950.
Policymakers treated falling prices not as relief but as a warning: deflation
raises the real weight of debt precisely when households are drowning in it,
which is why the Federal Reserve pinned interest rates near zero, began buying
bonds by the hundreds of billions, and Washington passed a $787 billion
stimulus. The medicine took: prices stabilized within a year, and 2009 remains
the textbook case of why central banks fear deflation more than moderate
inflation.
MLA: “Inflation from 1980 to 2009: $100 is worth $260 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1980-to-2009/
APA: InflationCalculator.com. Inflation from 1980 to 2009. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1980-to-2009/