$100 in 1983 is worth $108 in 1985,
because prices increased 8.0% over that period, an average of
3.94% a year.
$100 in 1983 has
the same buying power as
$108
in 1985
Detailed inflation statistics
Cumulative price change
8.0%
Average inflation rate
3.94% per year
Converted amount ($100 base)
$108
Price difference ($100 base)
$8.03
CPI in 1983
99.6
CPI in 1985
107.6
Inflation in 1983
3.21%
Inflation in 1985
3.56%
$100 in 1983 → 1985
$108
$100 in 1985 → 1983
$92.57
What happened to prices between 1983 and 1985
Between 1983 and 1985, the Consumer Price Index went from 99.6 to 107.6.
Cumulatively, prices increased 8.0%, which works out to an average of
3.94% per year. Put differently, a dollar in 1983 bought what
$0.93 buys in 1985: the 1983 dollar
lost 7.4% of its purchasing power over
these 2 years.
1983 confirmed that the Volcker disinflation was not a one-year fluke.
Consumer prices rose 3.2% for the year, nearly identical to 1982’s pace and a
fraction of the double-digit rates of 1980 and 1981. With inflation tamed and
interest rates coming down, the economy roared back from the 1981-82
recession: real GDP grew 4.6%, the strongest calendar-year growth since the
1950s, and unemployment fell from its 10.8% peak to 8.3% by December. Housing
and auto sales, both starved of credit during the recession, led the
rebound. In April, Congress and President Reagan enacted the Social Security
Amendments of 1983, a bipartisan rescue of a system projected to run out of
money within months. The law gradually raised the full retirement age from
65 to 67, began taxing benefits for higher-income retirees, and delayed that
year’s cost-of-living adjustment by six months. For a program whose benefits
had been indexed to the CPI since 1975, the amendments were the first major
sign that inflation-proofing Social Security carried a cost Congress could
not simply legislate away. By year’s end, gas averaged $1.16 a gallon and
mailing a letter still cost 20 cents, prices that had barely moved since
1981, a sharp break from the constant increases of the previous decade.
Every 1983 amount converts to 1985 at the same ratio, 1.08: $1,000 becomes
$1,080, and $10,000 becomes $10,803.
Amount in 1983
Value in 1985
$1.00
$1.08
$5.00
$5.40
$10.00
$10.80
$20.00
$21.61
$50.00
$54.02
$100
$108
$500
$540
$1,000
$1,080
$5,000
$5,402
$10,000
$10,803
$100,000
$108,032
$1,000,000
$1,080,321
Inflation by spending category, 1983–1985
Between 1983 and 1985, medical care rose the most, up 12.8%, while energy rose the least, up 1.7%, against 8.0% for all items. The headline number is an average; here is what $100 of 1983
spending costs in 1985, by category:
Category
Avg. yearly inflation
$100 in 1983 →
All items (CPI-U)
3.94%
$108
Medical care
6.22%
$113
Core (all items less food & energy)
4.66%
$110
Housing
4.04%
$108
Transportation
3.51%
$107
Food
3.07%
$106
Apparel
2.37%
$105
Energy
0.85%
$102
Not shown because the BLS began these indexes after 1983: recreation (1993–), education & communication (1993–).
Year by year: CPI and the value of $100 from 1983
$100 from 1983 had already become $104 by
1984, on its way to $108 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 3.6% in 1985.
In 1985, prices rose 3.6% and $100 from 1983 had the buying
power of $108; 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 1983 to 1985: $100 is worth $108 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1983-to-1985/
APA: InflationCalculator.com. Inflation from 1983 to 1985. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1983-to-1985/