U.S. inflation rate in 1981: 10.32%

Inflation in 1981 and its effect on dollar value

$1 in 1980 is equivalent in purchasing power to about $1.10 in 1981. The dollar had an average inflation rate of 10.32% per year between 1980 and 1981, producing a cumulative price increase of 10.32%. Purchasing power decreased by 10.32% in 1981 compared to 1980. On average, you would have to spend 10.32% more money in 1981 than in 1980 for the same item.

This means that prices in 1981 are 1.10 times as high as average prices since 1980, according to the Bureau of Labor Statistics consumer price index.

The inflation rate in 1980 was 13.50%. The inflation rate in 1981 was 10.32%. The 1981 inflation rate is higher compared to the average inflation rate of 2.89% per year between 1981 and 2023.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1981 was 90.90. It was 82.40 in the previous year, 1980. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.

Inflation from 1980 to 1981
Average inflation rate10.32%
Converted amount ($1 base)$1.10
Price difference ($1 base)$0.10
CPI in 198082.400
CPI in 198190.900
Inflation in 198013.50%
Inflation in 198110.32%
$1 in 1980$1.10 in 1981

Recent USD inflation
Annual Rate, the 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 1980 to 1981 (figures shown are purchasing power equivalents of $1):

San Francisco, California experienced the highest rate of inflation during the 1 years between 1980 and 1981 (12.60%).

Detroit, Michigan experienced the lowest rate of inflation during the 1 years between 1980 and 1981 (9.28%).

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 1980 would be equivalent to £1.12 in 1981, an absolute change of £0.12 and a cumulative change of 11.87%.

In Canada, CA$1.00 in 1980 would be equivalent to CA$1.12 in 1981, an absolute change of CA$0.12 and a cumulative change of 12.47%.

Compare these numbers to the US's overall absolute change of $0.10 and total percent change of 10.32%.

Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. Breaking down these categories helps explain the main drivers behind price changes.

Between 1980 and 1981:

This chart shows the average rate of inflation for select CPI categories between 1980 and 1981.

Compare these values to the overall average of 10.32% per year:

CategoryAvg Inflation (%)Total Inflation (%)$1 in 1980 → 1981
Food and beverages7.787.781.08
Medical care10.7510.751.11
Education and communication0.000.001.00
Other goods and services9.939.931.10

For all these visualizations, it's important to note that not all categories may have been tracked since 1980. This table and charts use the earliest available data for each category.

How to calculate inflation rate for $1, 1980 to 1981

Our calculations use the following inflation rate formula to calculate the change in value between 1980 and 1981:

CPI in 1981 CPI in 1980
1980 USD value
1981 USD value

Then plug in historical CPI values. The U.S. CPI was 82.4 in the year 1980 and 90.9 in 1981:


$1 in 1980 has the same "purchasing power" or "buying power" as $1.10 in 1981.

To get the total inflation rate for the 1 years between 1980 and 1981, we use the following formula:

CPI in 1981 - CPI in 1980CPI in 1980
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

90.9 - 82.482.4

Alternate Measurements of Inflation

There are multiple ways to measure inflation. Published rates of inflation will vary depending on methodology. The Consumer Price Index, used above, is the most common standard used globally.

Alternative measurements are sometimes used based on context and economic/political circumstances. Below are a few examples of alternative measurements.

Personal Consumption Expenditures (PCE) Inflation

The PCE Price Index is the U.S. Federal Reserve's preferred measure of inflation, compiled by the Bureau of Economic Analysis. It measures the change in prices of goods and services purchased by consumers.

The PCE Price Index changed by 8.96% per year on average between 1980 and 1981. The total PCE inflation between these dates was 8.96%. In 1980, PCE inflation was 10.77%.

This means that the PCE Index equates $1 in 1980 with $1.09 in 1981, a difference of $0.09. Compare this to the standard CPI measurement, which equates $1 with $1.10. The PCE measured -1.36% inflation compared to standard CPI.

For more information on the difference between PCE and CPI, see this analysis provided by the Bureau of Labor Statistics.

Core Inflation

Also of note is the Core CPI, which uses the standard CPI but omits the more volatile categories of food and energy.

Core inflation averaged 10.46% per year between 1980 and 1981 (vs all-CPI inflation of 10.32%), for an inflation total of 10.46%. In 1980, core inflation was 12.42%.

When using the core inflation measurement, $1 in 1980 is equivalent in buying power to $1.10 in 1981, a difference of $0.10. Recall that the converted amount is $1.10 when all items including food and energy are measured.

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 1980, our investment would be nominally worth approximately $1.17 in 1981. This is a return on investment of 16.92%, with an absolute return of $0.17 on top of the original $1.

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 9.35% of returns ($0.11) during this period. This means the inflation-adjusted real return of our $1 investment is $0.06. You may also want to account for capital gains tax, which would take your real return down to around $0 for most people.

Investment in S&P 500 Index, 1980-1981
Original AmountFinal AmountChange
Inflation Adjusted

Information displayed above may differ slightly from other S&P 500 calculators. Minor discrepancies can occur because we use the latest CPI data for inflation, annualized inflation numbers for previous years, and we compute S&P price and dividends from January of 1980 to latest available data for 1981 using average monthly close price.

For more details on the S&P 500 between 1980 and 1981, see the stock market returns calculator.

Data source & citation

Raw data for these calculations comes from the Bureau of Labor Statistics' (CPI), established in 1913. Inflation data from 1634 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University and from the American Antiquarian Society.

You may use the following MLA citation for this page: “Inflation Rate in 1981 | Inflation Calculator.” Official Inflation Data, Alioth Finance, 15 Mar. 2023, https://www.officialdata.org/inflation-rate-in-1981%23:~:text=The%20inflation%20rate%20in%201981,CPI%20in%201981%20was%2090.90..

Special thanks to QuickChart for their chart image API, which is used for chart downloads.

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

Ian Webster

About the author

Ian Webster is an engineer and data expert based in San Mateo, California. He has worked for Google, NASA, and consulted for governments around the world on data pipelines and data analysis. Disappointed by the lack of clear resources on the impacts of inflation on economic indicators, Ian believes this website serves as a valuable public tool. Ian earned his degree in Computer Science from Dartmouth College.

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Inflation from 1980 to 1981
Average inflation rate10.32%
Converted amount ($1 base)$1.10
Price difference ($1 base)$0.10
CPI in 198082.400
CPI in 198190.900
Inflation in 198013.50%
Inflation in 198110.32%
$1 in 1980$1.10 in 1981