$100 in 1974 is worth $218 in 1985,
because prices increased 118.3% over that period, an average of
7.35% a year.
$100 in 1974 has
the same buying power as
$218
in 1985
Detailed inflation statistics
Cumulative price change
118.3%
Average inflation rate
7.35% per year
Converted amount ($100 base)
$218
Price difference ($100 base)
$118
CPI in 1974
49.3
CPI in 1985
107.6
Inflation in 1974
11.04%
Inflation in 1985
3.56%
$100 in 1974 → 1985
$218
$100 in 1985 → 1974
$45.82
What happened to prices between 1974 and 1985
Between 1974 and 1985, the Consumer Price Index went from 49.3 to 107.6.
Cumulatively, prices increased 118.3%, which works out to an average of
7.35% per year. Put differently, a dollar in 1974 bought what
$0.46 buys in 1985: the 1974 dollar
lost 54.2% of its purchasing power over
these 11 years.
1974 was the year the postwar economy broke its old rules. Consumer prices
rose 11.0%, the fastest annual increase since 1947, as the Arab oil embargo
that ran from October 1973 to March 1974 roughly quadrupled the price of
crude oil worldwide. Gasoline, which had averaged 38.5 cents a gallon in
1973, jumped to 53.2 cents, and shortages forced many states into odd-even
rationing at the pump. Nixon’s wage and price controls, in place in some form
since 1971, expired at the end of April, removing the last brake on prices
just as the oil shock hit. Nixon himself resigned in August over Watergate,
and Gerald Ford’s response to inflation, a voluntary “Whip Inflation Now”
campaign built around lapel buttons, became a symbol of how little
conventional politics could do against the problem. Prices kept climbing even
as the economy weakened: a recession that started in November 1973 dragged
on, the Dow fell to a bear-market bottom of 577.60 in December, and
unemployment was already rising toward the 9% it would reach in 1975. The
combination of rising prices and a shrinking economy gave the decade its
name: stagflation.
Every 1974 amount converts to 1985 at the same ratio, 2.18: $1,000 becomes
$2,183, and $10,000 becomes $21,826.
Amount in 1974
Value in 1985
$1.00
$2.18
$5.00
$10.91
$10.00
$21.83
$20.00
$43.65
$50.00
$109
$100
$218
$500
$1,091
$1,000
$2,183
$5,000
$10,913
$10,000
$21,826
$100,000
$218,256
$1,000,000
$2,182,556
Inflation by spending category, 1974–1985
Between 1974 and 1985, medical care rose the most, up 167.7%, while apparel rose the least, up 51.3%, against 118.3% for all items. The headline number is an average; here is what $100 of 1974
spending costs in 1985, by category:
Category
Avg. yearly inflation
$100 in 1974 →
All items (CPI-U)
7.35%
$218
Medical care
9.36%
$268
Energy
9.33%
$267
Housing
8.08%
$235
Transportation
7.96%
$232
Core (all items less food & energy)
7.47%
$221
Food
6.09%
$192
Apparel
3.84%
$151
Not shown because the BLS began these indexes after 1974: recreation (1993–), education & communication (1993–).
Decade by decade: 1974 to 1985
Prices climbed fastest in the 1970s, averaging 8.94% a year, and slowest in the 1980s (5.48% a year). Each step below chains into the full 1974–1985 change:
Years
Avg. yearly inflation
Price change
$100 from 1974, at end
1974–1980
8.94%
67.1%
$167
1980–1985
5.48%
30.6%
$218
Year by year: CPI and the value of $100 from 1974
$100 from 1974 had already become $147 by
1979, on its way to $218 in 1985; 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 3.2% in 1983.
In 1985, prices rose 3.6% and $100 from 1974 had the buying
power of $218; the year's average CPI of 107.6 is the level
behind every 1985 figure on this page.
By 1985, low inflation had become the norm rather than the exception.
Consumer prices rose 3.6% for the year, the fourth straight year in the
3-6% range following the double-digit spikes of 1980 and 1981, proof that
the disinflation had held rather than merely paused, as it had after
previous recessions. Overseas, the dollar had become a problem of its own:
years of high U.S. interest rates had pulled in foreign capital and pushed
the dollar’s value up so far that American exporters were losing business
abroad, widening the trade deficit. In September, the finance ministers of
the U.S., Japan, West Germany, France, and the United Kingdom met at New
York’s Plaza Hotel and agreed to coordinate a managed decline of the
dollar; it fell roughly 25% against major currencies over the following two
years. At home, Congress responded to a federal deficit that had roughly
tripled since 1980 by passing the Gramm-Rudman-Hollings Act in December,
setting binding targets to shrink the deficit with automatic
across-the-board cuts if lawmakers missed them. Households felt the calmer
economy in small ways: first-class postage rose to 22 cents in February,
its first increase since November 1981, after nearly four years at 20
cents.
MLA: “Inflation from 1974 to 1985: $100 is worth $218 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1974-to-1985/
APA: InflationCalculator.com. Inflation from 1974 to 1985. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1974-to-1985/