$100 in 1984 is worth $104 in 1985,
because prices increased 3.6% over that period, an average of
3.56% a year.
$100 in 1984 has
the same buying power as
$104
in 1985
Detailed inflation statistics
Cumulative price change
3.6%
Average inflation rate
3.56% per year
Converted amount ($100 base)
$104
Price difference ($100 base)
$3.56
CPI in 1984
103.9
CPI in 1985
107.6
Inflation in 1984
4.32%
Inflation in 1985
3.56%
$100 in 1984 → 1985
$104
$100 in 1985 → 1984
$96.56
What happened to prices between 1984 and 1985
Between 1984 and 1985, the Consumer Price Index went from 103.9 to 107.6.
Cumulatively, prices increased 3.6%, which works out to an average of
3.56% per year. Put differently, a dollar in 1984 bought what
$0.97 buys in 1985: the 1984 dollar
lost 3.4% of its purchasing power over
these 1 years.
1984 was the year the recovery became a boom. Real GDP grew 7.2%, the
fastest calendar-year growth since 1951, as the tax cuts passed in 1981
combined with falling interest rates and rebuilding consumer confidence.
Unemployment, which had topped 10.8% just two years earlier, fell below
7.5%. Inflation ticked up to 4.3% from 3.2% the year before, but nothing
close to a return of the 1970s wage-price spiral: the Federal Reserve under
Paul Volcker kept policy tight enough to hold the line while growth ran hot.
The strength of the expansion, branded “Morning in America” in President
Reagan’s reelection campaign, carried him to a 49-state landslide over
Walter Mondale that November, at the time the widest electoral-vote margin
in U.S. history. For households, the numbers behind the slogan were
concrete: median income rose to about $22,400, and a gallon of gas cost
$1.13, roughly what it had cost three years earlier even as wages kept
climbing. The contrast with 1980, when 13.5% inflation and interest rates
near 20% had defined the economy, could not have been sharper.
Every 1984 amount converts to 1985 at the same ratio, 1.04: $1,000 becomes
$1,036, and $10,000 becomes $10,356.
Amount in 1984
Value in 1985
$1.00
$1.04
$5.00
$5.18
$10.00
$10.36
$20.00
$20.71
$50.00
$51.78
$100
$104
$500
$518
$1,000
$1,036
$5,000
$5,178
$10,000
$10,356
$100,000
$103,561
$1,000,000
$1,035,611
Inflation by spending category, 1984–1985
Between 1984 and 1985, medical care rose the most, up 6.3%, while energy rose the least, up 0.7%, against 3.6% for all items. The headline number is an average; here is what $100 of 1984
spending costs in 1985, by category:
Category
Avg. yearly inflation
$100 in 1984 →
All items (CPI-U)
3.56%
$104
Medical care
6.27%
$106
Core (all items less food & energy)
4.30%
$104
Housing
3.96%
$104
Apparel
2.84%
$103
Transportation
2.60%
$103
Food
2.33%
$102
Energy
0.69%
$101
Not shown because the BLS began these indexes after 1984: recreation (1993–), education & communication (1993–).
Year by year: CPI and the value of $100 from 1984
$100 from 1984grew to $104 by 1985; each row
shows the CPI, that year's inflation rate, and the running value.
In 1985, prices rose 3.6% and $100 from 1984 had the buying
power of $104; 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 1984 to 1985: $100 is worth $104 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1984-to-1985/
APA: InflationCalculator.com. Inflation from 1984 to 1985. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1984-to-1985/