$100 in 1971 is worth $306 in 1989,
because prices increased 206.2% over that period, an average of
6.41% a year.
$100 in 1971 has
the same buying power as
$306
in 1989
Detailed inflation statistics
Cumulative price change
206.2%
Average inflation rate
6.41% per year
Converted amount ($100 base)
$306
Price difference ($100 base)
$206
CPI in 1971
40.5
CPI in 1989
124
Inflation in 1971
4.38%
Inflation in 1989
4.82%
$100 in 1971 → 1989
$306
$100 in 1989 → 1971
$32.66
What happened to prices between 1971 and 1989
Between 1971 and 1989, the Consumer Price Index went from 40.5 to 124.
Cumulatively, prices increased 206.2%, which works out to an average of
6.41% per year. Put differently, a dollar in 1971 bought what
$0.33 buys in 1989: the 1971 dollar
lost 67.3% of its purchasing power over
these 18 years.
Consumer prices rose 4.4% in 1971, down from 1970’s 5.7% as
the recession that started in December 1969 finally cooled demand. The bigger
economic story came that August 15, when President Nixon closed the “gold
window” that let foreign governments exchange dollars for gold, ending the
Bretton Woods system that had anchored the dollar since World War II. The
same address announced a 90-day freeze on wages and prices, the first
peacetime controls the country had seen, an attempt to break inflationary
expectations without the slower grind of tighter money. The “Nixon Shock,” as
it came to be known, let the dollar float against other currencies for the
first time and set the stage for a wage-and-price-control regime that would
run in various forms into 1973. Politically, the country lowered its voting
age that year: the 26th Amendment, ratified July 1, extended the vote to
18-year-olds, capping a campaign built on the argument that men old enough to
be drafted to Vietnam were old enough to vote for the people who sent them.
The Postal Service, independent since 1970’s reorganization, raised
first-class postage from 6 to 8 cents that May. A median household earned
$9,028 in 1971, up from $8,734 the year before, while gas held near 36 cents
a gallon and a new home sold for a median $25,200. Consumer prices stood
309.1% above their 1913 level by year’s end, still years away
from the double-digit inflation the controls were meant to prevent.
Every 1971 amount converts to 1989 at the same ratio, 3.06: $1,000 becomes
$3,062, and $10,000 becomes $30,617.
Amount in 1971
Value in 1989
$1.00
$3.06
$5.00
$15.31
$10.00
$30.62
$20.00
$61.23
$50.00
$153
$100
$306
$500
$1,531
$1,000
$3,062
$5,000
$15,309
$10,000
$30,617
$100,000
$306,173
$1,000,000
$3,061,728
Inflation by spending category, 1971–1989
Between 1971 and 1989, medical care rose the most, up 313.6%, while apparel rose the least, up 94.1%, against 206.2% for all items. The headline number is an average; here is what $100 of 1971
spending costs in 1989, by category:
Category
Avg. yearly inflation
$100 in 1971 →
All items (CPI-U)
6.41%
$306
Medical care
8.21%
$414
Energy
7.31%
$356
Housing
6.74%
$324
Food
6.48%
$310
Core (all items less food & energy)
6.33%
$302
Transportation
6.07%
$289
Apparel
3.75%
$194
Not shown because the BLS began these indexes after 1971: recreation (1993–), education & communication (1993–).
Decade by decade: 1971 to 1989
Prices climbed fastest in the 1970s, averaging 8.21% a year, and slowest in the 1980s (4.65% a year). Each step below chains into the full 1971–1989 change:
Years
Avg. yearly inflation
Price change
$100 from 1971, at end
1971–1980
8.21%
103.5%
$203
1980–1989
4.65%
50.5%
$306
Year by year: CPI and the value of $100 from 1971
$100 from 1971 had already become $203 by
1980, on its way to $306 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 1971 had the buying
power of $306; 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 1971 to 1989: $100 is worth $306 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1971-to-1989/
APA: InflationCalculator.com. Inflation from 1971 to 1989. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1971-to-1989/