$100 in 1981 is worth $125 in 1987,
because prices increased 25.0% over that period, an average of
3.79% a year.
$100 in 1981 has
the same buying power as
$125
in 1987
Detailed inflation statistics
Cumulative price change
25.0%
Average inflation rate
3.79% per year
Converted amount ($100 base)
$125
Price difference ($100 base)
$24.97
CPI in 1981
90.9
CPI in 1987
113.6
Inflation in 1981
10.32%
Inflation in 1987
3.65%
$100 in 1981 → 1987
$125
$100 in 1987 → 1981
$80.02
What happened to prices between 1981 and 1987
Between 1981 and 1987, the Consumer Price Index went from 90.9 to 113.6.
Cumulatively, prices increased 25.0%, which works out to an average of
3.79% per year. Put differently, a dollar in 1981 bought what
$0.80 buys in 1987: the 1981 dollar
lost 20.0% of its purchasing power over
these 6 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 1987 at the same ratio, 1.25: $1,000 becomes
$1,250, and $10,000 becomes $12,497.
Amount in 1981
Value in 1987
$1.00
$1.25
$5.00
$6.25
$10.00
$12.50
$20.00
$24.99
$50.00
$62.49
$100
$125
$500
$625
$1,000
$1,250
$5,000
$6,249
$10,000
$12,497
$100,000
$124,972
$1,000,000
$1,249,725
Inflation by spending category, 1981–1987
Between 1981 and 1987, medical care rose the most, up 56.9%, while energy fell 9.3%, against 25.0% for all items. The headline number is an average; here is what $100 of 1981
spending costs in 1987, by category:
Category
Avg. yearly inflation
$100 in 1981 →
All items (CPI-U)
3.79%
$125
Medical care
7.80%
$157
Core (all items less food & energy)
4.80%
$133
Housing
3.97%
$126
Food
3.27%
$121
Apparel
2.51%
$116
Transportation
2.07%
$113
Energy
-1.62%
$90.69
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 $114 by
1984, on its way to $125 in 1987; 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 1987, prices rose 3.6% and $100 from 1981 had the buying
power of $125; the year's average CPI of 113.6 is the level
behind every 1987 figure on this page.
1987 tested whether the disinflation of the 1980s could survive its first
real shock. Paul Volcker, who had run the Federal Reserve since 1979 and
driven inflation down from 13.5% to routine mid-single digits, handed the
chairmanship to Alan Greenspan in August. Inflation for the year came in at
3.6%, edging up as the expansion entered its fifth year and a weaker
dollar, following 1985’s Plaza Accord, pushed up the price of imported
goods. Then, on October 19, the stock market delivered Greenspan’s first
crisis: the Dow Jones Industrial Average fell 22.6% in a single session,
still the largest one-day percentage drop in its history, as computer-driven
“portfolio insurance” trading amplified a global sell-off that had started
days earlier. The Fed responded within 24 hours, publicly pledging to
supply whatever liquidity the banking system needed, and the panic did not
spread to the broader economy. Growth continued and unemployment kept
falling through the rest of the year. It was an early demonstration of what
became known as the “Greenspan put,” a Fed willing to move fast and loosen
policy to contain financial shocks even while still watching inflation,
that shaped central banking for the next two decades.
MLA: “Inflation from 1981 to 1987: $100 is worth $125 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1981-to-1987/
APA: InflationCalculator.com. Inflation from 1981 to 1987. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1981-to-1987/