$100 in 1981 is worth $130 in 1988,
because prices increased 30.1% over that period, an average of
3.84% a year.
$100 in 1981 has
the same buying power as
$130
in 1988
Detailed inflation statistics
Cumulative price change
30.1%
Average inflation rate
3.84% per year
Converted amount ($100 base)
$130
Price difference ($100 base)
$30.14
CPI in 1981
90.9
CPI in 1988
118.3
Inflation in 1981
10.32%
Inflation in 1988
4.14%
$100 in 1981 → 1988
$130
$100 in 1988 → 1981
$76.84
What happened to prices between 1981 and 1988
Between 1981 and 1988, the Consumer Price Index went from 90.9 to 118.3.
Cumulatively, prices increased 30.1%, which works out to an average of
3.84% per year. Put differently, a dollar in 1981 bought what
$0.77 buys in 1988: the 1981 dollar
lost 23.2% of its purchasing power over
these 7 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 1988 at the same ratio, 1.30: $1,000 becomes
$1,301, and $10,000 becomes $13,014.
Amount in 1981
Value in 1988
$1.00
$1.30
$5.00
$6.51
$10.00
$13.01
$20.00
$26.03
$50.00
$65.07
$100
$130
$500
$651
$1,000
$1,301
$5,000
$6,507
$10,000
$13,014
$100,000
$130,143
$1,000,000
$1,301,430
Inflation by spending category, 1981–1988
Between 1981 and 1988, medical care rose the most, up 67.2%, while energy fell 8.6%, against 30.1% for all items. The headline number is an average; here is what $100 of 1981
spending costs in 1988, by category:
Category
Avg. yearly inflation
$100 in 1981 →
All items (CPI-U)
3.84%
$130
Medical care
7.62%
$167
Core (all items less food & energy)
4.75%
$138
Housing
3.94%
$131
Food
3.39%
$126
Apparel
2.77%
$121
Transportation
2.22%
$117
Energy
-1.28%
$91.40
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 $130 in 1988; 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 1988, prices rose 4.1% and $100 from 1981 had the buying
power of $130; the year's average CPI of 118.3 is the level
behind every 1988 figure on this page.
By 1988, the economic expansion that began in the ashes of the 1981-82
recession was in its sixth year, and the Federal Reserve was watching for
signs it had run too long. Inflation rose to 4.1%, up from 3.6% the year
before, while unemployment fell to its lowest level since 1974. Alan
Greenspan’s Fed responded by raising the federal funds rate through the
year, from about 6.5% to 8.5%, trying to cool demand before prices
accelerated the way they had in the 1970s. Households still felt the
difference between this expansion and the last one: gas held near 90 cents
a gallon, almost exactly its 1987 price, and median household income rose
to roughly $27,200. The one price that moved was postage, which rose from
22 to 25 cents in April, the fourth increase of the decade but a far
gentler pace than the string of increases in the late 1970s and early
1980s. In November, Vice President George H.W. Bush won the presidency on
the strength of the expansion, promising in his nomination speech to hold
the line on taxes. Both the boom and that pledge would run into trouble
within two years, as the Fed’s rate increases helped tip the economy toward
the 1990-91 recession.
MLA: “Inflation from 1981 to 1988: $100 is worth $130 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1981-to-1988/
APA: InflationCalculator.com. Inflation from 1981 to 1988. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1981-to-1988/