$100 in 1983 is worth $119 in 1988,
because prices increased 18.8% over that period, an average of
3.50% a year.
$100 in 1983 has
the same buying power as
$119
in 1988
Detailed inflation statistics
Cumulative price change
18.8%
Average inflation rate
3.50% per year
Converted amount ($100 base)
$119
Price difference ($100 base)
$18.78
CPI in 1983
99.6
CPI in 1988
118.3
Inflation in 1983
3.21%
Inflation in 1988
4.14%
$100 in 1983 → 1988
$119
$100 in 1988 → 1983
$84.19
What happened to prices between 1983 and 1988
Between 1983 and 1988, the Consumer Price Index went from 99.6 to 118.3.
Cumulatively, prices increased 18.8%, which works out to an average of
3.50% per year. Put differently, a dollar in 1983 bought what
$0.84 buys in 1988: the 1983 dollar
lost 15.8% of its purchasing power over
these 5 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 1988 at the same ratio, 1.19: $1,000 becomes
$1,188, and $10,000 becomes $11,878.
Amount in 1983
Value in 1988
$1.00
$1.19
$5.00
$5.94
$10.00
$11.88
$20.00
$23.76
$50.00
$59.39
$100
$119
$500
$594
$1,000
$1,188
$5,000
$5,939
$10,000
$11,878
$100,000
$118,775
$1,000,000
$1,187,751
Inflation by spending category, 1983–1988
Between 1983 and 1988, medical care rose the most, up 37.8%, while energy fell 10.6%, against 18.8% for all items. The headline number is an average; here is what $100 of 1983
spending costs in 1988, by category:
Category
Avg. yearly inflation
$100 in 1983 →
All items (CPI-U)
3.50%
$119
Medical care
6.62%
$138
Core (all items less food & energy)
4.38%
$124
Housing
3.56%
$119
Food
3.53%
$119
Apparel
2.86%
$115
Transportation
1.83%
$109
Energy
-2.22%
$89.39
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 $108 by
1985, on its way to $119 in 1988; 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 1.9% in 1986.
In 1988, prices rose 4.1% and $100 from 1983 had the buying
power of $119; 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 1983 to 1988: $100 is worth $119 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1983-to-1988/
APA: InflationCalculator.com. Inflation from 1983 to 1988. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1983-to-1988/