$100 in 1965 is worth $394 in 1989,
because prices increased 293.7% over that period, an average of
5.88% a year.
$100 in 1965 has
the same buying power as
$394
in 1989
Detailed inflation statistics
Cumulative price change
293.7%
Average inflation rate
5.88% per year
Converted amount ($100 base)
$394
Price difference ($100 base)
$294
CPI in 1965
31.5
CPI in 1989
124
Inflation in 1965
1.61%
Inflation in 1989
4.82%
$100 in 1965 → 1989
$394
$100 in 1989 → 1965
$25.40
What happened to prices between 1965 and 1989
Between 1965 and 1989, the Consumer Price Index went from 31.5 to 124.
Cumulatively, prices increased 293.7%, which works out to an average of
5.88% per year. Put differently, a dollar in 1965 bought what
$0.25 buys in 1989: the 1965 dollar
lost 74.6% of its purchasing power over
these 24 years.
Consumer prices rose 1.6% in 1965, up from 1964’s 1.3% in a
pickup that economists later mark as the start of the Great
Inflation, a run of accelerating
price increases driven by rising Vietnam War spending layered on top of
new Great Society programs. The war itself escalated on the ground that
March, when about 3,500 Marines came ashore at Da Nang, the first American
combat troops committed to Vietnam; troop levels would climb toward
200,000 by year’s end. Domestic policy expanded just as fast: Medicare and
Medicaid became law that July 30, creating federal health insurance for
older and low-income Americans, and the Voting Rights Act, signed that
August 6, banned literacy tests and other devices used to disenfranchise
Black voters. The civil rights movement’s gains coexisted with urban
unrest that same August, when a highway patrol traffic stop in the Watts
neighborhood of Los Angeles set off six days of rioting that left 34
people dead. Consumer prices finished 1965 218.2% above their
1913 level. First-class postage held at 5 cents, and the
minimum wage stayed at $1.25 an hour.
Every 1965 amount converts to 1989 at the same ratio, 3.94: $1,000 becomes
$3,937, and $10,000 becomes $39,365.
Amount in 1965
Value in 1989
$1.00
$3.94
$5.00
$19.68
$10.00
$39.37
$20.00
$78.73
$50.00
$197
$100
$394
$500
$1,968
$1,000
$3,937
$5,000
$19,683
$10,000
$39,365
$100,000
$393,651
$1,000,000
$3,936,508
Inflation by spending category, 1965–1989
Between 1965 and 1989, medical care rose the most, up 492.5%, while apparel rose the least, up 148.1%, against 293.7% for all items. The headline number is an average; here is what $100 of 1965
spending costs in 1989, by category:
Category
Avg. yearly inflation
$100 in 1965 →
All items (CPI-U)
5.88%
$394
Medical care
7.69%
$592
Energy
6.07%
$412
Core (all items less food & energy)
5.89%
$394
Food
5.82%
$389
Transportation
5.45%
$358
Apparel
3.86%
$248
Not shown because the BLS began these indexes after 1965: housing (1967–), recreation (1993–), education & communication (1993–).
Decade by decade: 1965 to 1989
Prices climbed fastest in the 1970s, averaging 7.82% a year, and slowest in the 1960s (4.26% a year). Each step below chains into the full 1965–1989 change:
Years
Avg. yearly inflation
Price change
$100 from 1965, at end
1965–1970
4.26%
23.2%
$123
1970–1980
7.82%
112.4%
$262
1980–1989
4.65%
50.5%
$394
Year by year: CPI and the value of $100 from 1965
$100 from 1965 had already become $192 by
1977, on its way to $394 in 1989; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 13.5% in 1980, and the smallest rise was 1.9% in 1986.
In 1989, prices rose 4.8% and $100 from 1965 had the buying
power of $394; the year's average CPI of 124 is the level
behind every 1989 figure on this page.
1989 closed out a decade that began in economic crisis and ended in a long,
calmer expansion. Inflation for the year came in at 4.8%, higher than the
mid-decade lull but still roughly a third of the 13.5% peak that had opened
the decade in 1980. The federal minimum wage, unchanged at $3.35 an hour
since January 1981, had gone longer without an increase than at any point
since Congress created it, and had lost close to a third of its purchasing
power to inflation in the meantime; lawmakers would finally raise it to
$3.80 the following April. The decade’s other unfinished business came due
in August, when Congress passed FIRREA, the law that created the Resolution
Trust Corporation to seize and sell off the hundreds of savings and loan
institutions that a decade of deregulation and risky lending had left
insolvent, a bailout that eventually cost taxpayers over $100 billion. On
Wall Street, the recovery was already complete: the Dow Jones Industrial
Average closed 1989 at a record high, just over two years after Black
Monday’s 22.6% single-day crash, capping the bull market that had begun at
the Dow’s 776 low in August 1982. Between the S&L bailout, a wage floor
eroded by years without a raise, and a stock market at new highs, 1989
captured how unevenly the decade’s disinflation had been felt.
MLA: “Inflation from 1965 to 1989: $100 is worth $394 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1965-to-1989/
APA: InflationCalculator.com. Inflation from 1965 to 1989. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1965-to-1989/