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# U.S. inflation rate in 1980: 13.50%

### Inflation in 1980 and Its Effect on Dollar Value

Purchasing power decreased by 13.50% in 1980 compared to 1979. On average, you would have to spend 13.50% more money in 1980 than in 1979 for the same item.

In other words, \$1 in 1979 is equivalent in purchasing power to about \$1.13 in 1980.

The 1979 inflation rate was 11.35%. The inflation rate in 1980 was 13.50%. The 1980 inflation rate is higher compared to the average inflation rate of 2.96% per year between 1980 and 2019.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1980 was 82.40. It was 72.60 in the previous year, 1979. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.

 Average inflation rate 13.50% Converted amount (\$1 base) \$1.13 Price difference (\$1 base) \$0.13 CPI in 1979 72.600 CPI in 1980 82.400 Inflation in 1979 11.35% Inflation in 1980 13.50%

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 1979 to 1980 (figures shown are purchasing power equivalents of \$1):

Dallas-Fort Worth, Texas experienced the highest rate of inflation during the 1 years between 1979 and 1980 (16.95%).

New York experienced the lowest rate of inflation during the 1 years between 1979 and 1980 (11.29%).

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 1979 would be equivalent to £1.18 in 1980, an absolute change of £0.18 and a cumulative change of 17.99%.

In Canada, CA\$1.00 in 1979 would be equivalent to CA\$1.11 in 1980, an absolute change of CA\$0.11 and a cumulative change of 11.06%.

Compare these numbers to the US's overall absolute change of \$0.13 and total percent change of 13.50%.

### 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 1979 and 1980.

Compare these values to the overall average of 13.50% per year:

Category Avg Inflation (%) Total Inflation (%) \$1 in 1979 → 1980
Food 8.59 8.59 1.09
Shelter 17.55 17.55 1.18
Energy 30.84 30.84 1.31
Apparel 7.07 7.07 1.07
New vehicles 0.00 0.00 1.00
Used cars and trucks 0.00 0.00 1.00
Transportation services 14.00 14.00 1.14
Medical care services 11.28 11.28 1.11
Medical care commodities 9.34 9.34 1.09

It's important to note that not all categories may be tracked since 1979. This table and visualization use the earliest available data for each category.

### How to Calculate Inflation Rate for \$1, 1979 to 1980

This inflation calculator uses the following inflation rate formula:

CPI in 1980CPI in 1979
×
1979 USD value
=
1980 USD value

Then plug in historical CPI values. The U.S. CPI was 72.6 in the year 1979 and 82.4 in 1980:

82.472.6
×
\$1
=
\$1.13

\$1 in 1979 has the same "purchasing power" or "buying power" as \$1.13 in 1980.

To get the total inflation rate for the 1 years between 1979 and 1980, we use the following formula:

CPI in 1980 - CPI in 1979CPI in 1979
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

82.4 - 72.672.6
×
100
=
13%

### 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 12.42% per year between 1979 and 1980 (vs all-CPI inflation of 13.50%), for an inflation total of 12.42%.

When using the core inflation measurement, \$1 in 1979 is equivalent in buying power to \$1.12 in 1980, a difference of \$0.12. Recall that for All Items, the converted amount is \$1.13 with a difference of \$0.13.

In 1979, core inflation was 9.74%.

### 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 1979, our investment would be nominally worth approximately \$1.48 in 1980. This is a return on investment of 47.59%, with an absolute return of \$0.48.

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 11.89% of returns (\$0.06) during this period. This means the inflation-adjusted real return of our \$1 investment is \$0.42.

Investment in S&P 500 Index, 1979-1980
Original Amount Final Amount Change
Nominal \$1 \$1.48 47.59%
Real
\$1 \$0.42 41.93%

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

• Ayatollah Khomeini returns to Iran after fifteen years of exile.
• Ugandan dictator Idi Amin flees to Libya after the Tanzanian army captures Kampala, Uganda's capital.
• Margaret Thatcher becomes Prime Minister of United Kingdom, the first ever woman to hold the position.
• Afghanistan is invaded by the Soviets and overthrowing of President Hafizullah Amin.

### 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 1980 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 24 Oct. 2019, https://www.officialdata.org/inflation-rate-in-1980.