$100 in 1985 is worth $151 in 1998,
because prices increased 51.5% over that period, an average of
3.25% a year.
$100 in 1985 has
the same buying power as
$151
in 1998
Detailed inflation statistics
Cumulative price change
51.5%
Average inflation rate
3.25% per year
Converted amount ($100 base)
$151
Price difference ($100 base)
$51.49
CPI in 1985
107.6
CPI in 1998
163
Inflation in 1985
3.56%
Inflation in 1998
1.56%
$100 in 1985 → 1998
$151
$100 in 1998 → 1985
$66.01
What happened to prices between 1985 and 1998
Between 1985 and 1998, the Consumer Price Index went from 107.6 to 163.
Cumulatively, prices increased 51.5%, which works out to an average of
3.25% per year. Put differently, a dollar in 1985 bought what
$0.66 buys in 1998: the 1985 dollar
lost 34.0% of its purchasing power over
these 13 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 1998 at the same ratio, 1.51: $1,000 becomes
$1,515, and $10,000 becomes $15,149.
Amount in 1985
Value in 1998
$1.00
$1.51
$5.00
$7.57
$10.00
$15.15
$20.00
$30.30
$50.00
$75.74
$100
$151
$500
$757
$1,000
$1,515
$5,000
$7,574
$10,000
$15,149
$100,000
$151,487
$1,000,000
$1,514,870
Inflation by spending category, 1985–1998
Between 1985 and 1998, medical care rose the most, up 113.3%, while energy rose the least, up 1.3%, against 51.5% for all items. The headline number is an average; here is what $100 of 1985
spending costs in 1998, by category:
Category
Avg. yearly inflation
$100 in 1985 →
All items (CPI-U)
3.25%
$151
Medical care
6.00%
$213
Core (all items less food & energy)
3.63%
$159
Food
3.28%
$152
Housing
3.11%
$149
Transportation
2.22%
$133
Apparel
1.84%
$127
Energy
0.10%
$101
Not shown because the BLS began these indexes after 1985: recreation (1993–), education & communication (1993–).
Decade by decade: 1985 to 1998
Prices climbed fastest in the 1980s, averaging 3.97% a year, and slowest in the 1990s (2.80% a year). Each step below chains into the full 1985–1998 change:
Years
Avg. yearly inflation
Price change
$100 from 1985, at end
1985–1990
3.97%
21.5%
$121
1990–1998
2.80%
24.7%
$151
Year by year: CPI and the value of $100 from 1985
$100 from 1985 had already become $127 by
1991, on its way to $151 in 1998; 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 1.6% in 1998.
In 1998, prices rose 1.6% and $100 from 1985 had the buying
power of $151; the year's average CPI of 163 is the level
behind every 1998 figure on this page.
The median household earned about $38,900 in 1998, gas averaged just $1.06 a gallon, its
cheapest of the decade, and a new home cost roughly $152,500. Inflation ran at 1.6% for the
year, the lowest of the 1990s, as a glut of crude oil, worsened by weak demand from Asia’s
slowdown, pushed prices below $11 a barrel by December and pulled pump prices down with them.
The calm at home came alongside real turmoil abroad: in August, Russia devalued the ruble and
defaulted on its domestic debt, rattling markets already unsettled by the Asian financial
crisis, and in September the hedge fund Long-Term Capital Management collapsed after its highly
leveraged bets went bad, prompting the Federal Reserve to organize a private-sector bailout by
more than a dozen banks to prevent a disorderly unwinding of its roughly $100 billion in
positions. The Fed also cut interest rates three times that fall, in September, October, and
November, an insurance policy against the global financial turmoil spreading to the U.S.
economy. Cheap oil and a well-timed set of rate cuts left 1998 as a year the U.S. economy
absorbed two foreign financial crises without much of a dent at home.
MLA: “Inflation from 1985 to 1998: $100 is worth $151 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1985-to-1998/
APA: InflationCalculator.com. Inflation from 1985 to 1998. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1985-to-1998/