$100 in 1985 is worth $213 in 2012,
because prices increased 113.4% over that period, an average of
2.85% a year.
$100 in 1985 has
the same buying power as
$213
in 2012
Detailed inflation statistics
Cumulative price change
113.4%
Average inflation rate
2.85% per year
Converted amount ($100 base)
$213
Price difference ($100 base)
$113
CPI in 1985
107.6
CPI in 2012
229.594
Inflation in 1985
3.56%
Inflation in 2012
2.07%
$100 in 1985 → 2012
$213
$100 in 2012 → 1985
$46.87
What happened to prices between 1985 and 2012
Between 1985 and 2012, the Consumer Price Index went from 107.6 to 229.594.
Cumulatively, prices increased 113.4%, which works out to an average of
2.85% per year. Put differently, a dollar in 1985 bought what
$0.47 buys in 2012: the 1985 dollar
lost 53.1% of its purchasing power over
these 27 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 2012 at the same ratio, 2.13: $1,000 becomes
$2,134, and $10,000 becomes $21,338.
Amount in 1985
Value in 2012
$1.00
$2.13
$5.00
$10.67
$10.00
$21.34
$20.00
$42.68
$50.00
$107
$100
$213
$500
$1,067
$1,000
$2,134
$5,000
$10,669
$10,000
$21,338
$100,000
$213,377
$1,000,000
$2,133,773
Inflation by spending category, 1985–2012
Between 1985 and 2012, medical care rose the most, up 265.6%, while apparel rose the least, up 20.3%, against 113.4% for all items. The headline number is an average; here is what $100 of 1985
spending costs in 2012, by category:
Category
Avg. yearly inflation
$100 in 1985 →
All items (CPI-U)
2.85%
$213
Medical care
4.92%
$366
Energy
3.33%
$242
Food
2.99%
$221
Core (all items less food & energy)
2.80%
$211
Housing
2.73%
$207
Transportation
2.68%
$204
Apparel
0.69%
$120
Not shown because the BLS began these indexes after 1985: recreation (1993–), education & communication (1993–).
Decade by decade: 1985 to 2012
Prices climbed fastest in the 1980s, averaging 3.97% a year, and slowest in the 2000s (2.39% a year). Each step below chains into the full 1985–2012 change:
Years
Avg. yearly inflation
Price change
$100 from 1985, at end
1985–1990
3.97%
21.5%
$121
1990–2000
2.80%
31.8%
$160
2000–2010
2.39%
26.6%
$203
2010–2012
2.61%
5.3%
$213
Year by year: CPI and the value of $100 from 1985
$100 from 1985 had already become $151 by
1998, on its way to $213 in 2012; 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 prices fell 0.4% in 2009, the deepest deflation of the period.
In 2012, prices rose 2.1% and $100 from 1985 had the buying
power of $213; the year's average CPI of 229.594 is the level
behind every 2012 figure on this page.
2012 put a number on what the Federal Reserve was aiming for. In January the
Fed announced a 2% inflation target, and consumer prices rose 2.1% for the
year, almost exactly on it. Gasoline averaged $3.62 a gallon, another annual
high, but the pace of increase cooled from 2011’s 3.2% as food and core prices
grew more slowly.
The bigger story was housing and jobs. Home prices began to recover, and the
median new home sold for about $245,200, up from $227,200 the year before.
Median household income was $51,017. The federal minimum wage held at $7.25,
and a first-class stamp rose to 45 cents.
In September the Fed started a third round of asset purchases, this one with
no fixed end date, aimed at lowering unemployment. Overseas, the European
Central Bank’s July pledge to do “whatever it takes” to save the euro calmed
bond markets. A summer drought across the Midwest drove corn and soybean
prices to records, a shock that reached grocery shelves only partly, because
most of what shoppers pay for food covers processing and transport rather than
raw crops.
MLA: “Inflation from 1985 to 2012: $100 is worth $213 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1985-to-2012/
APA: InflationCalculator.com. Inflation from 1985 to 2012. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1985-to-2012/