$100 in 1985 is worth $102 in 1986,
because prices increased 1.9% over that period, an average of
1.86% a year.
$100 in 1985 has
the same buying power as
$102
in 1986
Detailed inflation statistics
Cumulative price change
1.9%
Average inflation rate
1.86% per year
Converted amount ($100 base)
$102
Price difference ($100 base)
$1.86
CPI in 1985
107.6
CPI in 1986
109.6
Inflation in 1985
3.56%
Inflation in 1986
1.86%
$100 in 1985 → 1986
$102
$100 in 1986 → 1985
$98.18
What happened to prices between 1985 and 1986
Between 1985 and 1986, the Consumer Price Index went from 107.6 to 109.6.
Cumulatively, prices increased 1.9%, which works out to an average of
1.86% per year. Put differently, a dollar in 1985 bought what
$0.98 buys in 1986: the 1985 dollar
lost 1.8% of its purchasing power over
these 1 years.
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.
Every 1985 amount converts to 1986 at the same ratio, 1.02: $1,000 becomes
$1,019, and $10,000 becomes $10,186.
Amount in 1985
Value in 1986
$1.00
$1.02
$5.00
$5.09
$10.00
$10.19
$20.00
$20.37
$50.00
$50.93
$100
$102
$500
$509
$1,000
$1,019
$5,000
$5,093
$10,000
$10,186
$100,000
$101,859
$1,000,000
$1,018,587
Inflation by spending category, 1985–1986
Between 1985 and 1986, medical care rose the most, up 7.5%, while energy fell 13.2%, against 1.9% for all items. The headline number is an average; here is what $100 of 1985
spending costs in 1986, by category:
Category
Avg. yearly inflation
$100 in 1985 →
All items (CPI-U)
1.86%
$102
Medical care
7.49%
$107
Core (all items less food & energy)
4.03%
$104
Food
3.22%
$103
Housing
2.97%
$103
Apparel
0.86%
$101
Transportation
-3.85%
$96.15
Energy
-13.19%
$86.81
Not shown because the BLS began these indexes after 1985: recreation (1993–), education & communication (1993–).
Year by year: CPI and the value of $100 from 1985
$100 from 1985grew to $102 by 1986; each row
shows the CPI, that year's inflation rate, and the running value.
In 1986, prices rose 1.9% and $100 from 1985 had the buying
power of $102; 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 1985 to 1986: $100 is worth $102 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1985-to-1986/
APA: InflationCalculator.com. Inflation from 1985 to 1986. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1985-to-1986/