$100 in 1982 is worth $112 in 1985,
because prices increased 11.5% over that period, an average of
3.70% a year.
$100 in 1982 has
the same buying power as
$112
in 1985
Detailed inflation statistics
Cumulative price change
11.5%
Average inflation rate
3.70% per year
Converted amount ($100 base)
$112
Price difference ($100 base)
$11.50
CPI in 1982
96.5
CPI in 1985
107.6
Inflation in 1982
6.16%
Inflation in 1985
3.56%
$100 in 1982 → 1985
$112
$100 in 1985 → 1982
$89.68
What happened to prices between 1982 and 1985
Between 1982 and 1985, the Consumer Price Index went from 96.5 to 107.6.
Cumulatively, prices increased 11.5%, which works out to an average of
3.70% per year. Put differently, a dollar in 1982 bought what
$0.90 buys in 1985: the 1982 dollar
lost 10.3% of its purchasing power over
these 3 years.
1982 was the hard bottom of the disinflation Paul Volcker had set in motion.
Consumer prices rose just 6.2% for the year, roughly half of 1981’s rate and a
fraction of the 13.5% peak from two years earlier. The price fell because
demand had been crushed: the recession that began in July 1981 did not
officially end until November 1982, and unemployment kept climbing even as
the economy technically began to recover, reaching 10.8% in November and
December, the highest rate since the Great Depression. Manufacturing and
construction, especially the auto and housing industries starved of credit by
double-digit interest rates, bore the worst of it. Abroad, Mexico’s August
announcement that it could not service its foreign debt opened a Latin
American debt crisis that spread across the region and forced the Federal
Reserve and IMF into emergency lending. The stress on the financial system
pushed Volcker to start easing interest rates that October, stepping back
from the strict money-supply targets he had followed since 1979. Markets read
the shift correctly: the Dow Jones Industrial Average bottomed at 776.92 in
mid-August, and the rally that followed became the opening leg of the 1980s
bull market. By year’s end, the trade-off Volcker had bet on was becoming
visible: much lower inflation, at the cost of the worst unemployment in 40
years.
Every 1982 amount converts to 1985 at the same ratio, 1.12: $1,000 becomes
$1,115, and $10,000 becomes $11,150.
Amount in 1982
Value in 1985
$1.00
$1.12
$5.00
$5.58
$10.00
$11.15
$20.00
$22.30
$50.00
$55.75
$100
$112
$500
$558
$1,000
$1,115
$5,000
$5,575
$10,000
$11,150
$100,000
$111,503
$1,000,000
$1,115,026
Inflation by spending category, 1982–1985
Between 1982 and 1985, medical care rose the most, up 22.7%, while energy rose the least, up 2.4%, against 11.5% for all items. The headline number is an average; here is what $100 of 1982
spending costs in 1985, by category:
Category
Avg. yearly inflation
$100 in 1982 →
All items (CPI-U)
3.70%
$112
Medical care
7.06%
$123
Core (all items less food & energy)
4.43%
$114
Housing
3.59%
$111
Transportation
3.13%
$110
Food
2.73%
$108
Apparel
2.40%
$107
Energy
0.80%
$102
Not shown because the BLS began these indexes after 1982: recreation (1993–), education & communication (1993–).
Year by year: CPI and the value of $100 from 1982
$100 from 1982 had already become $103 by
1983, on its way to $112 in 1985; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 4.3% in 1984, and the smallest rise was 3.2% in 1983.
In 1985, prices rose 3.6% and $100 from 1982 had the buying
power of $112; the year's average CPI of 107.6 is the level
behind every 1985 figure on this page.
By 1985, low inflation had become the norm rather than the exception.
Consumer prices rose 3.6% for the year, the fourth straight year in the
3-6% range following the double-digit spikes of 1980 and 1981, proof that
the disinflation had held rather than merely paused, as it had after
previous recessions. Overseas, the dollar had become a problem of its own:
years of high U.S. interest rates had pulled in foreign capital and pushed
the dollar’s value up so far that American exporters were losing business
abroad, widening the trade deficit. In September, the finance ministers of
the U.S., Japan, West Germany, France, and the United Kingdom met at New
York’s Plaza Hotel and agreed to coordinate a managed decline of the
dollar; it fell roughly 25% against major currencies over the following two
years. At home, Congress responded to a federal deficit that had roughly
tripled since 1980 by passing the Gramm-Rudman-Hollings Act in December,
setting binding targets to shrink the deficit with automatic
across-the-board cuts if lawmakers missed them. Households felt the calmer
economy in small ways: first-class postage rose to 22 cents in February,
its first increase since November 1981, after nearly four years at 20
cents.
MLA: “Inflation from 1982 to 1985: $100 is worth $112 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1982-to-1985/
APA: InflationCalculator.com. Inflation from 1982 to 1985. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1982-to-1985/