$100 in 1984 is worth $105 in 1986,
because prices increased 5.5% over that period, an average of
2.71% a year.
$100 in 1984 has
the same buying power as
$105
in 1986
Detailed inflation statistics
Cumulative price change
5.5%
Average inflation rate
2.71% per year
Converted amount ($100 base)
$105
Price difference ($100 base)
$5.49
CPI in 1984
103.9
CPI in 1986
109.6
Inflation in 1984
4.32%
Inflation in 1986
1.86%
$100 in 1984 → 1986
$105
$100 in 1986 → 1984
$94.80
What happened to prices between 1984 and 1986
Between 1984 and 1986, the Consumer Price Index went from 103.9 to 109.6.
Cumulatively, prices increased 5.5%, which works out to an average of
2.71% per year. Put differently, a dollar in 1984 bought what
$0.95 buys in 1986: the 1984 dollar
lost 5.2% of its purchasing power over
these 2 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 1986 at the same ratio, 1.05: $1,000 becomes
$1,055, and $10,000 becomes $10,549.
Amount in 1984
Value in 1986
$1.00
$1.05
$5.00
$5.27
$10.00
$10.55
$20.00
$21.10
$50.00
$52.74
$100
$105
$500
$527
$1,000
$1,055
$5,000
$5,274
$10,000
$10,549
$100,000
$105,486
$1,000,000
$1,054,860
Inflation by spending category, 1984–1986
Between 1984 and 1986, medical care rose the most, up 14.2%, while energy fell 12.6%, against 5.5% for all items. The headline number is an average; here is what $100 of 1984
spending costs in 1986, by category:
Category
Avg. yearly inflation
$100 in 1984 →
All items (CPI-U)
2.71%
$105
Medical care
6.88%
$114
Core (all items less food & energy)
4.17%
$109
Housing
3.46%
$107
Food
2.77%
$106
Apparel
1.84%
$104
Transportation
-0.68%
$98.65
Energy
-6.50%
$87.41
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 1984 had already become $104 by
1985, on its way to $105 in 1986; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 3.6% in 1985, and the smallest rise was 1.9% in 1986.
In 1986, prices rose 1.9% and $100 from 1984 had the buying
power of $105; the year's average CPI of 109.6 is the level
behind every 1986 figure on this page.
1986 delivered the decade’s biggest one-year drop in inflation, and it came
almost entirely from a single source: oil. Saudi Arabia abandoned its policy
of restraining output to prop up prices, and world crude collapsed from
about $27 a barrel to under $10 by midyear. Gasoline, which had averaged
$1.12 a gallon in 1985, fell to 86 cents. With energy costs plunging,
headline CPI inflation for the year came in at just 1.9%, the lowest annual
rate since 1965 and a striking bookend to 1980’s 13.5% peak. The relief was
uneven: prices for most goods and services outside energy kept rising at a
moderate pace, so households that didn’t drive much or heat with oil felt
less of the difference. In October, Congress passed the Tax Reform Act of
1986, a bipartisan overhaul that cut the top individual income tax rate from
50% to 28% while closing many deductions and shelters, the broadest rewrite
of the federal tax code since World War II. Between cheap gas and falling
interest rates, 1986 read like proof that the inflationary 1970s were a
closed chapter, six years after the U.S. economy had felt anything but
calm.
MLA: “Inflation from 1984 to 1986: $100 is worth $105 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1984-to-1986/
APA: InflationCalculator.com. Inflation from 1984 to 1986. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1984-to-1986/