$100 in 1985 is worth $138 in 1994,
because prices increased 37.7% over that period, an average of
3.62% a year.
$100 in 1985 has
the same buying power as
$138
in 1994
Detailed inflation statistics
Cumulative price change
37.7%
Average inflation rate
3.62% per year
Converted amount ($100 base)
$138
Price difference ($100 base)
$37.73
CPI in 1985
107.6
CPI in 1994
148.2
Inflation in 1985
3.56%
Inflation in 1994
2.56%
$100 in 1985 → 1994
$138
$100 in 1994 → 1985
$72.60
What happened to prices between 1985 and 1994
Between 1985 and 1994, the Consumer Price Index went from 107.6 to 148.2.
Cumulatively, prices increased 37.7%, which works out to an average of
3.62% per year. Put differently, a dollar in 1985 bought what
$0.73 buys in 1994: the 1985 dollar
lost 27.4% of its purchasing power over
these 9 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 1994 at the same ratio, 1.38: $1,000 becomes
$1,377, and $10,000 becomes $13,773.
Amount in 1985
Value in 1994
$1.00
$1.38
$5.00
$6.89
$10.00
$13.77
$20.00
$27.55
$50.00
$68.87
$100
$138
$500
$689
$1,000
$1,377
$5,000
$6,887
$10,000
$13,773
$100,000
$137,732
$1,000,000
$1,377,323
Inflation by spending category, 1985–1994
Between 1985 and 1994, medical care rose the most, up 85.9%, while energy rose the least, up 3.0%, against 37.7% for all items. The headline number is an average; here is what $100 of 1985
spending costs in 1994, by category:
Category
Avg. yearly inflation
$100 in 1985 →
All items (CPI-U)
3.62%
$138
Medical care
7.13%
$186
Core (all items less food & energy)
4.09%
$143
Food
3.53%
$137
Housing
3.34%
$134
Apparel
2.70%
$127
Transportation
2.62%
$126
Energy
0.32%
$103
Not shown because the BLS began these indexes after 1985: recreation (1993–), education & communication (1993–).
Decade by decade: 1985 to 1994
Prices climbed fastest in the 1980s, averaging 3.97% a year, and slowest in the 1990s (3.19% a year). Each step below chains into the full 1985–1994 change:
Years
Avg. yearly inflation
Price change
$100 from 1985, at end
1985–1990
3.97%
21.5%
$121
1990–1994
3.19%
13.4%
$138
Year by year: CPI and the value of $100 from 1985
$100 from 1985 had already become $115 by
1989, on its way to $138 in 1994; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 5.4% in 1990, and the smallest rise was 1.9% in 1986.
In 1994, prices rose 2.6% and $100 from 1985 had the buying
power of $138; the year's average CPI of 148.2 is the level
behind every 1994 figure on this page.
Gas averaged $1.11 a gallon in 1994, a new home cost roughly $130,000, and the median household
earned about $32,300. Inflation ran at 2.6% for the year, the calmest reading since the
mid-1980s, even as the Federal Reserve spent the year raising interest rates precisely to keep
it that way. Chair Alan Greenspan’s Fed lifted the federal funds rate from 3% to 5.5% over six
moves, a preemptive tightening campaign meant to head off inflation before it built rather than
react to it after the fact. The bond market, unprepared for such a rapid climb, sold off
sharply, and the higher rates rippled into places few had expected: Orange County, California,
whose investment pool had bet heavily on rates staying low, filed for bankruptcy in December
after losing an estimated $1.7 billion, the largest municipal bankruptcy in the country’s
history at the time. On the trade front, NAFTA took effect January 1, phasing out tariffs on
thousands of goods moving between the U.S., Mexico, and Canada, the start of a schedule that
would eliminate most remaining barriers over the following decade. It was a year that showed
inflation control could have its own costs, paid out in the bond market and, in Orange County’s
case, a bankruptcy court.
MLA: “Inflation from 1985 to 1994: $100 is worth $138 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1985-to-1994/
APA: InflationCalculator.com. Inflation from 1985 to 1994. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1985-to-1994/