The 1970s was a rough decade for Americans financially. Families had to contend with two recessions, multiple oil crises, and widespread inflation. Unfortunately, households didn’t get any reprieve at the end of the decade. The cost of living in 1978 shot up yet again due to the second oil shock of the 70s. To understand this financially challenging time, let’s take a closer look at the cost of living in 1978.
The Cost of Living in 1978
In 1978, the annual inflation rate was a little over 7% and the price of gas climbed to a whopping $0.63 per gallon. At the beginning of the decade, gas cost just $0.36 a gallon, so this increase put a major strain on household budgets.
Although wages rose during the 70s, salaries just couldn’t keep up with runaway inflation. The average family only earned about $16,600 per year according to The People History while prices surged. Here’s an overview of average prices to help you get an idea of the cost of necessities in the 70s.
Cost of Food
Grocery prices can vary depending on where you live and tend to be more expensive in cities like New York. Back in the 70s, the cost of a cart of food in the Big Apple reached a whopping $77.99 according to The New York Times.
The basket didn’t include anything special or fancy—just 41 essential items like ground beef and coffee. It’s shocking that New Yorkers in the 70s spent the same amount on their weekly grocery run as I do today in 2024.
Groceries were likely less expensive in cheaper parts of the country in 1978. However, food inflation still averaged 9.7% that year, which took a bite out of household budgets all across the country. Here’s an overview of food prices in 1978, which were gathered from the NYT article above, Food Timeline, and Stacker.
Item | 1978 | |
| Sliced Bacon | $1.79/lb | $6.56/lb |
| Round Steak | $1.99/lb | $7.88/lb |
| Potatoes (10 lbs) | $1.40 | $8.80 |
| Half Gallon of Milk | $0.86 | $1.95 |
| Dozen Eggs | $0.79 | $2.52 |
| Box of Cereal | $1.15 | $5.39 |
| Chocolate Bar | $0.25 | $1.12 |
| Loaf of Bread | $0.36 | $2.00 |
| Box of Cookies | $0.79 | $3.29 |
| Can of Frozen Orange Juice | $1.01 | $4.21 |
| Lettuce | $0.79/lb | $2.56/lb |
| Can of Coffee | $3.61 | $6.09 |
| Ground Chuck | $1.14/lb | $5.21/lb |
| Sirloin Steak | $2.02/lb | $14.07/lb |
Cost of Major Expenses
Food wasn’t the only major cost that increased during the 70s. At the start of the decade, a new home only cost $23,400 according to The People History. By 1979, families were spending nearly $60,000 on houses. Interest rates were also high during this time, which made it even harder to get a foot on the property ladder.
Monthly rent also increased substantially during this time. In 1973, rent only cost about $175 per month compared to $260 in 1978. Transportation costs increased sharply as well due to the oil shock and rising price of vehicles. Families had to budget carefully to afford these inflated costs on modest incomes that weren’t keeping pace with inflation.
Item | 1970s |
| Monthly Rent | $260 |
| New Car | $5,400 |
| New House | $54,750 |
| Gas | $0.63 per gallon |
| College Tuition | $4,450 per year |
Cost of Having Fun
The high cost of living in 1978 didn’t leave much room for fun in people’s budgets. The average disposable income in 1978 was only $1,600 per year, compared to $20,000 per year today. People enjoyed simpler hobbies back then, such as going to the movies, watching TV, listening to the radio, and going to concerts occasionally.
Rollerskating, tennis, and dancing to disco music were also popular pastimes. Kids enjoyed riding bikes with friends, putting together model trains, and playing video games on early consoles like the Atari. Check out some of the prices of entertainment options in the 70s below.
Item | 1970s |
| Movie Ticket | $2.00 |
| Radio Shack Tandy TRS80 Computer | $399 |
| Disney World Adult Ticket | $6.50 |
| McDonald’s Big Mac | $0.90 |
| Concert Ticket | $7 |
For those who lived through it, what was the cost of living like in 1978 compared to today? Share your thoughts in the comments!
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Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.