$100 in 1981 is worth $136 in 1989,
because prices increased 36.4% over that period, an average of
3.96% a year.
$100 in 1981 has
the same buying power as
$136
in 1989
Detailed inflation statistics
Cumulative price change
36.4%
Average inflation rate
3.96% per year
Converted amount ($100 base)
$136
Price difference ($100 base)
$36.41
CPI in 1981
90.9
CPI in 1989
124
Inflation in 1981
10.32%
Inflation in 1989
4.82%
$100 in 1981 → 1989
$136
$100 in 1989 → 1981
$73.31
What happened to prices between 1981 and 1989
Between 1981 and 1989, the Consumer Price Index went from 90.9 to 124.
Cumulatively, prices increased 36.4%, which works out to an average of
3.96% per year. Put differently, a dollar in 1981 bought what
$0.73 buys in 1989: the 1981 dollar
lost 26.7% of its purchasing power over
these 8 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 1989 at the same ratio, 1.36: $1,000 becomes
$1,364, and $10,000 becomes $13,641.
Amount in 1981
Value in 1989
$1.00
$1.36
$5.00
$6.82
$10.00
$13.64
$20.00
$27.28
$50.00
$68.21
$100
$136
$500
$682
$1,000
$1,364
$5,000
$6,821
$10,000
$13,641
$100,000
$136,414
$1,000,000
$1,364,136
Inflation by spending category, 1981–1989
Between 1981 and 1989, medical care rose the most, up 80.1%, while energy fell 3.5%, against 36.4% for all items. The headline number is an average; here is what $100 of 1981
spending costs in 1989, by category:
Category
Avg. yearly inflation
$100 in 1981 →
All items (CPI-U)
3.96%
$136
Medical care
7.63%
$180
Core (all items less food & energy)
4.72%
$145
Housing
3.92%
$136
Food
3.69%
$134
Apparel
2.77%
$124
Transportation
2.56%
$122
Energy
-0.44%
$96.52
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 $118 by
1985, on its way to $136 in 1989; 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 1989, prices rose 4.8% and $100 from 1981 had the buying
power of $136; 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 1981 to 1989: $100 is worth $136 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1981-to-1989/
APA: InflationCalculator.com. Inflation from 1981 to 1989. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1981-to-1989/