U.S. inflation rate in 1978: 7.59%

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U.S. inflation rate in 1978: 7.59%

Inflation in 1978 and Its Effect on Dollar Value

Purchasing power decreased by 7.59% in 1978 compared to 1977. On average, you would have to spend 7.59% more money in 1978 than in 1977 for the same item.

In other words, $1 in 1977 is equivalent in purchasing power to about $1.08 in 1978.

The 1977 inflation rate was 6.50%. The inflation rate in 1978 was 7.59%. The 1978 inflation rate is higher compared to the average inflation rate of 3.40% per year between 1978 and 2019.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1978 was 65.20. It was 60.60 in the previous year, 1977. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.

Inflation from 1977 to 1978
Average inflation rate 7.59%
Converted amount ($1 base) $1.08
Price difference ($1 base) $0.08
CPI in 1977 60.600
CPI in 1978 65.200
Inflation in 1977 6.50%
Inflation in 1978 7.59%

USD Inflation since 1913
Annual Rate, U.S. Bureau of Labor Statistics CPI

Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1977 to 1978 (figures shown are purchasing power equivalents of $1):

Seattle, Washington experienced the highest rate of inflation during the 1 years between 1977 and 1978 (10.03%).

Boston, Massachusetts experienced the lowest rate of inflation during the 1 years between 1977 and 1978 (5.34%).

Note that some locations showing 0% inflation may have not yet reported latest data.

Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £1.00 in 1977 would be equivalent to £1.08 in 1978, an absolute change of £0.08 and a cumulative change of 8.30%.

In Canada, CA$1.00 in 1977 would be equivalent to CA$1.09 in 1978, an absolute change of CA$0.09 and a cumulative change of 8.60%.

Compare these numbers to the US's overall absolute change of $0.08 and total percent change of 7.59%.

Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. This chart shows the average rate of inflation for select CPI categories between 1977 and 1978.

Compare these values to the overall average of 7.59% per year:

Category Avg Inflation (%) Total Inflation (%) $1 in 1977 → 1978
Food 9.98 9.98 1.10
Shelter 10.09 10.09 1.10
Energy 6.36 6.36 1.06
Apparel 3.51 3.51 1.04
New vehicles 0.00 0.00 1.00
Used cars and trucks 0.00 0.00 1.00
Transportation services 4.80 4.80 1.05
Medical care services 8.65 8.65 1.09
Medical care commodities 7.03 7.03 1.07

It's important to note that not all categories may be tracked since 1977. This table and visualization use the earliest available data for each category.

How to Calculate Inflation Rate for $1, 1977 to 1978

This inflation calculator uses the following inflation rate formula:

CPI in 1978CPI in 1977
1977 USD value
1978 USD value

Then plug in historical CPI values. The U.S. CPI was 60.6 in the year 1977 and 65.2 in 1978:


$1 in 1977 has the same "purchasing power" or "buying power" as $1.08 in 1978.

To get the total inflation rate for the 1 years between 1977 and 1978, we use the following formula:

CPI in 1978 - CPI in 1977CPI in 1977
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

65.2 - 60.660.6

Alternate Measurements of Inflation

The above data describe the CPI for all items. Also of note is the Core CPI, which measures inflation for all items except for the more volatile categories of food and energy. Core inflation averaged 7.31% per year between 1977 and 1978 (vs all-CPI inflation of 7.59%), for an inflation total of 7.31%.

When using the core inflation measurement, $1 in 1977 is equivalent in buying power to $1.07 in 1978, a difference of $0.07. Recall that for All Items, the converted amount is $1.08 with a difference of $0.08.

In 1977, core inflation was 6.26%.

Comparison to S&P 500 Index

To help put this inflation into perspective, if we had invested $1 in the S&P 500 index in 1977, our investment would be nominally worth approximately $1.06 in 1978. This is a return on investment of 5.73%, with an absolute return of $0.06.

These numbers are not inflation adjusted, so they are considered nominal. In order to evaluate the real return on our investment, we must calculate the return with inflation taken into account.

The compounding effect of inflation would account for 7.06% of returns ($0.00) during this period. This means the inflation-adjusted real return of our $1 investment is $0.05.

Investment in S&P 500 Index, 1977-1978
Original Amount Final Amount Change
Nominal $1 $1.06 5.73%
Inflation Adjusted
$1 $0.05 5.32%

News headlines from 1977

Politics and news often influence economic performance. Here's what was happening at the time:

  • Apple Computer incorperated by Steve Jobs, Steve Wozniak, and Ronald Wayne.
  • The Hindu Kubh Mela gathered 15,000,000 people, making it (at the time) the biggest crowd gathering in history.
  • First Apple II computers are shipped.
  • The last Guillotine execution was performed on Hamida Djandoubi, convicted torturer and murderer.

Data Source & Citation

Raw data for these calculations comes from the Bureau of Labor Statistics' (CPI), established in 1913. Inflation data from 1665 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University.

You may use the following MLA citation for this page: “Inflation Rate in 1978 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 22 Oct. 2019, https://www.officialdata.org/inflation-rate-in-1978.

Special thanks to QuickChart for providing downloadable chart images.

in2013dollars.com is a reference website maintained by the Official Data Foundation.

» Read more about inflation and investment.

Inflation from 1977 to 1978
Average inflation rate 7.59%
Converted amount ($1 base) $1.08
Price difference ($1 base) $0.08
CPI in 1977 60.600
CPI in 1978 65.200
Inflation in 1977 6.50%
Inflation in 1978 7.59%