Inflation Rate in 1980

What happened to inflation in 1980

Inflation peaked as a second oil crisis met years of loose monetary policy — prompting the Federal Reserve under Paul Volcker to raise interest rates to record highs to break it.

In 1980, inflation ran at 13.55%, up from 11.25% in 1979. That made it the highest annual rate on record, and above the long-run average of 3.76%. For comparison, inflation sits at about 2.95% today.

What 1980's money is worth today

A rate is abstract until it's a price tag. Using the Consumer Price Index, here's what a given sum of 1980 dollars would have to grow to in order to buy the same goods today — the cumulative effect of every year of inflation in between:

Cumulative inflation since 1980 comes to about 281% — prices have risen roughly 3.8× over that span. Put another way, $100 today had the buying power of about $26 in 1980. To run your own figure across any two years, use the inflation calculator.

How 1980 compared

Across the full 1960–2024 record, inflation has averaged about 3.76%, so 1980 ran above that long-run norm. Within the 1980s, inflation averaged roughly 5.55%, and 1980 sat above its own decade. Five years earlier, in 1975, the rate was 9.14%. The following year, 1981, inflation eased to 10.33%.

This is one year out of the whole story. For the complete history — every year since 1960, the all-time high and the deflation low, the decade-by-decade view, and what drives inflation over time — see historical inflation rates, 1960–today.