$100 in 1983 is worth $124 in 1989,
because prices increased 24.5% over that period, an average of
3.72% a year.
$100 in 1983 has
the same buying power as
$124
in 1989
Detailed inflation statistics
Cumulative price change
24.5%
Average inflation rate
3.72% per year
Converted amount ($100 base)
$124
Price difference ($100 base)
$24.50
CPI in 1983
99.6
CPI in 1989
124
Inflation in 1983
3.21%
Inflation in 1989
4.82%
$100 in 1983 → 1989
$124
$100 in 1989 → 1983
$80.32
What happened to prices between 1983 and 1989
Between 1983 and 1989, the Consumer Price Index went from 99.6 to 124.
Cumulatively, prices increased 24.5%, which works out to an average of
3.72% per year. Put differently, a dollar in 1983 bought what
$0.80 buys in 1989: the 1983 dollar
lost 19.7% of its purchasing power over
these 6 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 1989 at the same ratio, 1.24: $1,000 becomes
$1,245, and $10,000 becomes $12,450.
Amount in 1983
Value in 1989
$1.00
$1.24
$5.00
$6.22
$10.00
$12.45
$20.00
$24.90
$50.00
$62.25
$100
$124
$500
$622
$1,000
$1,245
$5,000
$6,225
$10,000
$12,450
$100,000
$124,498
$1,000,000
$1,244,980
Inflation by spending category, 1983–1989
Between 1983 and 1989, medical care rose the most, up 48.4%, while energy fell 5.6%, against 24.5% for all items. The headline number is an average; here is what $100 of 1983
spending costs in 1989, by category:
Category
Avg. yearly inflation
$100 in 1983 →
All items (CPI-U)
3.72%
$124
Medical care
6.80%
$148
Core (all items less food & energy)
4.41%
$130
Food
3.91%
$126
Housing
3.60%
$124
Apparel
2.85%
$118
Transportation
2.34%
$115
Energy
-0.96%
$94.39
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 $110 by
1986, on its way to $124 in 1989; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 4.8% in 1989, and the smallest rise was 1.9% in 1986.
In 1989, prices rose 4.8% and $100 from 1983 had the buying
power of $124; 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 1983 to 1989: $100 is worth $124 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1983-to-1989/
APA: InflationCalculator.com. Inflation from 1983 to 1989. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1983-to-1989/