$100 in 1985 is worth $146 in 1996,
because prices increased 45.8% over that period, an average of
3.49% a year.
$100 in 1985 has
the same buying power as
$146
in 1996
Detailed inflation statistics
Cumulative price change
45.8%
Average inflation rate
3.49% per year
Converted amount ($100 base)
$146
Price difference ($100 base)
$45.82
CPI in 1985
107.6
CPI in 1996
156.9
Inflation in 1985
3.56%
Inflation in 1996
2.95%
$100 in 1985 → 1996
$146
$100 in 1996 → 1985
$68.58
What happened to prices between 1985 and 1996
Between 1985 and 1996, the Consumer Price Index went from 107.6 to 156.9.
Cumulatively, prices increased 45.8%, which works out to an average of
3.49% per year. Put differently, a dollar in 1985 bought what
$0.69 buys in 1996: the 1985 dollar
lost 31.4% of its purchasing power over
these 11 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 1996 at the same ratio, 1.46: $1,000 becomes
$1,458, and $10,000 becomes $14,582.
Amount in 1985
Value in 1996
$1.00
$1.46
$5.00
$7.29
$10.00
$14.58
$20.00
$29.16
$50.00
$72.91
$100
$146
$500
$729
$1,000
$1,458
$5,000
$7,291
$10,000
$14,582
$100,000
$145,818
$1,000,000
$1,458,178
Inflation by spending category, 1985–1996
Between 1985 and 1996, medical care rose the most, up 101.1%, while energy rose the least, up 8.4%, against 45.8% for all items. The headline number is an average; here is what $100 of 1985
spending costs in 1996, by category:
Category
Avg. yearly inflation
$100 in 1985 →
All items (CPI-U)
3.49%
$146
Medical care
6.56%
$201
Core (all items less food & energy)
3.87%
$152
Food
3.45%
$145
Housing
3.23%
$142
Transportation
2.72%
$134
Apparel
2.08%
$125
Energy
0.73%
$108
Not shown because the BLS began these indexes after 1985: recreation (1993–), education & communication (1993–).
Decade by decade: 1985 to 1996
Prices climbed fastest in the 1980s, averaging 3.97% a year, and slowest in the 1990s (3.09% a year). Each step below chains into the full 1985–1996 change:
Years
Avg. yearly inflation
Price change
$100 from 1985, at end
1985–1990
3.97%
21.5%
$121
1990–1996
3.09%
20.0%
$146
Year by year: CPI and the value of $100 from 1985
$100 from 1985 had already become $121 by
1990, on its way to $146 in 1996; 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 1996, prices rose 3.0% and $100 from 1985 had the buying
power of $146; the year's average CPI of 156.9 is the level
behind every 1996 figure on this page.
The median household earned about $35,500 in 1996, gas averaged $1.23 a gallon, up noticeably
from the mid-decade lull, and a new home cost roughly $140,000. Inflation ran at 3.0% for the
year, ticking back up from 1995 as energy prices firmed. Washington passed two of the decade’s
more consequential laws that year: in February, the Telecommunications Act rewrote the rules for
phone, cable, and broadcast media for the first time since 1934, opening local markets to
competition and easing ownership limits; in August, a welfare overhaul ended the federal
guarantee of cash assistance, replacing it with block grants to states and time limits on
benefits. In October, the federal minimum wage rose to $4.75 an hour, its first increase in five
years and the opening step of a two-part law that would take it to $5.15 the following
September. Two sweeping new laws and a minimum wage finally on the move again made 1996 a year
that changed more about how the economy was governed than about how fast prices moved.
MLA: “Inflation from 1985 to 1996: $100 is worth $146 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1985-to-1996/
APA: InflationCalculator.com. Inflation from 1985 to 1996. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1985-to-1996/