$100 in 1975 is worth $230 in 1989,
because prices increased 130.5% over that period, an average of
6.15% a year.
$100 in 1975 has
the same buying power as
$230
in 1989
Detailed inflation statistics
Cumulative price change
130.5%
Average inflation rate
6.15% per year
Converted amount ($100 base)
$230
Price difference ($100 base)
$130
CPI in 1975
53.8
CPI in 1989
124
Inflation in 1975
9.13%
Inflation in 1989
4.82%
$100 in 1975 → 1989
$230
$100 in 1989 → 1975
$43.39
What happened to prices between 1975 and 1989
Between 1975 and 1989, the Consumer Price Index went from 53.8 to 124.
Cumulatively, prices increased 130.5%, which works out to an average of
6.15% per year. Put differently, a dollar in 1975 bought what
$0.43 buys in 1989: the 1975 dollar
lost 56.6% of its purchasing power over
these 14 years.
Consumer prices rose 9.1% in 1975, easing slightly from 1974’s
11.0% but still running far above anything the country had experienced before
the decade began. The recession that started in November 1973, the deepest
since the Great Depression, bottomed out that March, yet unemployment kept
climbing through the year and touched 9%, a combination of high inflation and
high joblessness that had no precedent in the postwar data. Vietnam ended
that April 30, when North Vietnamese forces captured Saigon and the last
Americans were evacuated by helicopter from the U.S. embassy roof. Fiscal
strain hit closer to home too: New York City, facing bankruptcy after years
of borrowing to paper over budget gaps, asked Washington for help that
October. President Ford’s initial refusal produced the Daily News headline
“Ford to City: Drop Dead,” though he ultimately signed a federal loan package
that December. Amid the gloom, Bill Gates and Paul Allen founded Microsoft
that April in Albuquerque, New Mexico, to sell a version of the BASIC
programming language for the Altair 8800, one of the first personal
computers sold to hobbyists. A median household earned $11,800 in 1975, a new
home sold for a median $39,300, and first-class postage held at 10 cents,
unchanged since 1974’s increase. Consumer prices stood 443.4%
above their 1913 level, with the decade barely past its
midpoint.
Every 1975 amount converts to 1989 at the same ratio, 2.30: $1,000 becomes
$2,305, and $10,000 becomes $23,048.
Amount in 1975
Value in 1989
$1.00
$2.30
$5.00
$11.52
$10.00
$23.05
$20.00
$46.10
$50.00
$115
$100
$230
$500
$1,152
$1,000
$2,305
$5,000
$11,524
$10,000
$23,048
$100,000
$230,483
$1,000,000
$2,304,833
Inflation by spending category, 1975–1989
Between 1975 and 1989, medical care rose the most, up 214.3%, while apparel rose the least, up 63.6%, against 130.5% for all items. The headline number is an average; here is what $100 of 1975
spending costs in 1989, by category:
Category
Avg. yearly inflation
$100 in 1975 →
All items (CPI-U)
6.15%
$230
Medical care
8.52%
$314
Housing
6.54%
$243
Core (all items less food & energy)
6.43%
$239
Transportation
6.06%
$228
Energy
5.93%
$224
Food
5.41%
$209
Apparel
3.58%
$164
Not shown because the BLS began these indexes after 1975: recreation (1993–), education & communication (1993–).
Decade by decade: 1975 to 1989
Prices climbed fastest in the 1970s, averaging 8.90% a year, and slowest in the 1980s (4.65% a year). Each step below chains into the full 1975–1989 change:
Years
Avg. yearly inflation
Price change
$100 from 1975, at end
1975–1980
8.90%
53.2%
$153
1980–1989
4.65%
50.5%
$230
Year by year: CPI and the value of $100 from 1975
$100 from 1975 had already become $179 by
1982, on its way to $230 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 1975 had the buying
power of $230; 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 1975 to 1989: $100 is worth $230 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1975-to-1989/
APA: InflationCalculator.com. Inflation from 1975 to 1989. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1975-to-1989/