$100 in 1981 is worth $121 in 1986,
because prices increased 20.6% over that period, an average of
3.81% a year.
$100 in 1981 has
the same buying power as
$121
in 1986
Detailed inflation statistics
Cumulative price change
20.6%
Average inflation rate
3.81% per year
Converted amount ($100 base)
$121
Price difference ($100 base)
$20.57
CPI in 1981
90.9
CPI in 1986
109.6
Inflation in 1981
10.32%
Inflation in 1986
1.86%
$100 in 1981 → 1986
$121
$100 in 1986 → 1981
$82.94
What happened to prices between 1981 and 1986
Between 1981 and 1986, the Consumer Price Index went from 90.9 to 109.6.
Cumulatively, prices increased 20.6%, which works out to an average of
3.81% per year. Put differently, a dollar in 1981 bought what
$0.83 buys in 1986: the 1981 dollar
lost 17.1% of its purchasing power over
these 5 years.
1981 was the year the inflation fever finally broke, at an extraordinary price.
Consumer prices rose 10.3%, the second year of back-to-back double-digit
inflation and the last time the U.S. would see one. To end it, Paul Volcker’s
Federal Reserve drove its policy rate above 19% and let borrowing costs go
where they may: a 30-year mortgage cost more than 18% by autumn, car loans and
business credit froze, and homebuilders mailed the Fed two-by-fours in protest.
The squeeze tipped the economy into recession in July, the deep 1981–82
downturn that would push unemployment past 10%. But it worked. Inflation fell
by nearly half within a year and to under 4% by 1983, the disinflation that
defined the following two decades. Even the price of mailing a letter told the
year’s story: postage went up twice in eight months.
Every 1981 amount converts to 1986 at the same ratio, 1.21: $1,000 becomes
$1,206, and $10,000 becomes $12,057.
Amount in 1981
Value in 1986
$1.00
$1.21
$5.00
$6.03
$10.00
$12.06
$20.00
$24.11
$50.00
$60.29
$100
$121
$500
$603
$1,000
$1,206
$5,000
$6,029
$10,000
$12,057
$100,000
$120,572
$1,000,000
$1,205,721
Inflation by spending category, 1981–1986
Between 1981 and 1986, medical care rose the most, up 47.2%, while energy fell 9.7%, against 20.6% for all items. The headline number is an average; here is what $100 of 1981
spending costs in 1986, by category:
Category
Avg. yearly inflation
$100 in 1981 →
All items (CPI-U)
3.81%
$121
Medical care
8.03%
$147
Core (all items less food & energy)
4.94%
$127
Housing
4.17%
$123
Food
3.09%
$116
Apparel
2.13%
$111
Transportation
1.88%
$110
Energy
-2.03%
$90.28
Not shown because the BLS began these indexes after 1981: recreation (1993–), education & communication (1993–).
Year by year: CPI and the value of $100 from 1981
$100 from 1981 had already become $110 by
1983, on its way to $121 in 1986; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 6.2% in 1982, and the smallest rise was 1.9% in 1986.
In 1986, prices rose 1.9% and $100 from 1981 had the buying
power of $121; the year's average CPI of 109.6 is the level
behind every 1986 figure on this page.
1986 delivered the decade’s biggest one-year drop in inflation, and it came
almost entirely from a single source: oil. Saudi Arabia abandoned its policy
of restraining output to prop up prices, and world crude collapsed from
about $27 a barrel to under $10 by midyear. Gasoline, which had averaged
$1.12 a gallon in 1985, fell to 86 cents. With energy costs plunging,
headline CPI inflation for the year came in at just 1.9%, the lowest annual
rate since 1965 and a striking bookend to 1980’s 13.5% peak. The relief was
uneven: prices for most goods and services outside energy kept rising at a
moderate pace, so households that didn’t drive much or heat with oil felt
less of the difference. In October, Congress passed the Tax Reform Act of
1986, a bipartisan overhaul that cut the top individual income tax rate from
50% to 28% while closing many deductions and shelters, the broadest rewrite
of the federal tax code since World War II. Between cheap gas and falling
interest rates, 1986 read like proof that the inflationary 1970s were a
closed chapter, six years after the U.S. economy had felt anything but
calm.
MLA: “Inflation from 1981 to 1986: $100 is worth $121 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1981-to-1986/
APA: InflationCalculator.com. Inflation from 1981 to 1986. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1981-to-1986/