$100 in 1985 is worth $142 in 1995,
because prices increased 41.6% over that period, an average of
3.54% a year.
$100 in 1985 has
the same buying power as
$142
in 1995
Detailed inflation statistics
Cumulative price change
41.6%
Average inflation rate
3.54% per year
Converted amount ($100 base)
$142
Price difference ($100 base)
$41.64
CPI in 1985
107.6
CPI in 1995
152.4
Inflation in 1985
3.56%
Inflation in 1995
2.83%
$100 in 1985 → 1995
$142
$100 in 1995 → 1985
$70.60
What happened to prices between 1985 and 1995
Between 1985 and 1995, the Consumer Price Index went from 107.6 to 152.4.
Cumulatively, prices increased 41.6%, which works out to an average of
3.54% per year. Put differently, a dollar in 1985 bought what
$0.71 buys in 1995: the 1985 dollar
lost 29.4% of its purchasing power over
these 10 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 1995 at the same ratio, 1.42: $1,000 becomes
$1,416, and $10,000 becomes $14,164.
Amount in 1985
Value in 1995
$1.00
$1.42
$5.00
$7.08
$10.00
$14.16
$20.00
$28.33
$50.00
$70.82
$100
$142
$500
$708
$1,000
$1,416
$5,000
$7,082
$10,000
$14,164
$100,000
$141,636
$1,000,000
$1,416,357
Inflation by spending category, 1985–1995
Between 1985 and 1995, medical care rose the most, up 94.3%, while energy rose the least, up 3.5%, against 41.6% for all items. The headline number is an average; here is what $100 of 1985
spending costs in 1995, by category:
Category
Avg. yearly inflation
$100 in 1985 →
All items (CPI-U)
3.54%
$142
Medical care
6.87%
$194
Core (all items less food & energy)
3.98%
$148
Food
3.46%
$141
Housing
3.26%
$138
Transportation
2.72%
$131
Apparel
2.31%
$126
Energy
0.35%
$104
Not shown because the BLS began these indexes after 1985: recreation (1993–), education & communication (1993–).
Decade by decade: 1985 to 1995
Prices climbed fastest in the 1980s, averaging 3.97% a year, and slowest in the 1990s (3.12% a year). Each step below chains into the full 1985–1995 change:
Years
Avg. yearly inflation
Price change
$100 from 1985, at end
1985–1990
3.97%
21.5%
$121
1990–1995
3.12%
16.6%
$142
Year by year: CPI and the value of $100 from 1985
$100 from 1985 had already become $121 by
1990, on its way to $142 in 1995; 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 1995, prices rose 2.8% and $100 from 1985 had the buying
power of $142; the year's average CPI of 152.4 is the level
behind every 1995 figure on this page.
In 1995, gas averaged $1.15 a gallon, a new home cost roughly $133,900, and the median household
earned about $34,100. Inflation ran at 2.8% for the year, little changed from 1994, as the
Federal Reserve shifted from raising rates to cutting them. Having lifted its policy rate six
times the year before, the Fed judged by July that the economy had cooled enough on its own, and
trimmed rates instead, an outcome economists would later point to as a rare soft landing. The
year opened with a currency crisis: Mexico’s peso lost roughly half its value against the dollar
in a matter of weeks, and the U.S. Treasury and the IMF assembled a $50 billion rescue package,
controversial in Congress, to stabilize it and keep the crisis from spreading to other emerging
markets. Closer to home, a budget standoff between President Clinton and the Republican Congress
shut down federal agencies twice, first for five days in November and then for 21 days spanning
December into January 1996, the longest shutdown up to that point. The Postal Service raised the
cost of a first-class stamp to 32 cents in January. Low, steady inflation was about the only calm
part of 1995’s economic story.
MLA: “Inflation from 1985 to 1995: $100 is worth $142 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1985-to-1995/
APA: InflationCalculator.com. Inflation from 1985 to 1995. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1985-to-1995/