$100 in 1986 is worth $104 in 1987,
because prices increased 3.6% over that period, an average of
3.65% a year.
$100 in 1986 has
the same buying power as
$104
in 1987
Detailed inflation statistics
Cumulative price change
3.6%
Average inflation rate
3.65% per year
Converted amount ($100 base)
$104
Price difference ($100 base)
$3.65
CPI in 1986
109.6
CPI in 1987
113.6
Inflation in 1986
1.86%
Inflation in 1987
3.65%
$100 in 1986 → 1987
$104
$100 in 1987 → 1986
$96.48
What happened to prices between 1986 and 1987
Between 1986 and 1987, the Consumer Price Index went from 109.6 to 113.6.
Cumulatively, prices increased 3.6%, which works out to an average of
3.65% per year. Put differently, a dollar in 1986 bought what
$0.96 buys in 1987: the 1986 dollar
lost 3.5% of its purchasing power over
these 1 years.
1986 delivered the decade’s biggest one-year drop in inflation, and it came
almost entirely from a single source: oil. Saudi Arabia abandoned its policy
of restraining output to prop up prices, and world crude collapsed from
about $27 a barrel to under $10 by midyear. Gasoline, which had averaged
$1.12 a gallon in 1985, fell to 86 cents. With energy costs plunging,
headline CPI inflation for the year came in at just 1.9%, the lowest annual
rate since 1965 and a striking bookend to 1980’s 13.5% peak. The relief was
uneven: prices for most goods and services outside energy kept rising at a
moderate pace, so households that didn’t drive much or heat with oil felt
less of the difference. In October, Congress passed the Tax Reform Act of
1986, a bipartisan overhaul that cut the top individual income tax rate from
50% to 28% while closing many deductions and shelters, the broadest rewrite
of the federal tax code since World War II. Between cheap gas and falling
interest rates, 1986 read like proof that the inflationary 1970s were a
closed chapter, six years after the U.S. economy had felt anything but
calm.
Every 1986 amount converts to 1987 at the same ratio, 1.04: $1,000 becomes
$1,036, and $10,000 becomes $10,365.
Amount in 1986
Value in 1987
$1.00
$1.04
$5.00
$5.18
$10.00
$10.36
$20.00
$20.73
$50.00
$51.82
$100
$104
$500
$518
$1,000
$1,036
$5,000
$5,182
$10,000
$10,365
$100,000
$103,650
$1,000,000
$1,036,496
Inflation by spending category, 1986–1987
Between 1986 and 1987, medical care rose the most, up 6.6%, while energy rose the least, up 0.5%, against 3.6% for all items. The headline number is an average; here is what $100 of 1986
spending costs in 1987, by category:
Category
Avg. yearly inflation
$100 in 1986 →
All items (CPI-U)
3.65%
$104
Medical care
6.64%
$107
Apparel
4.44%
$104
Core (all items less food & energy)
4.14%
$104
Food
4.13%
$104
Transportation
3.03%
$103
Housing
2.98%
$103
Energy
0.45%
$100
Not shown because the BLS began these indexes after 1986: recreation (1993–), education & communication (1993–).
Year by year: CPI and the value of $100 from 1986
$100 from 1986grew to $104 by 1987; each row
shows the CPI, that year's inflation rate, and the running value.
In 1987, prices rose 3.6% and $100 from 1986 had the buying
power of $104; the year's average CPI of 113.6 is the level
behind every 1987 figure on this page.
1987 tested whether the disinflation of the 1980s could survive its first
real shock. Paul Volcker, who had run the Federal Reserve since 1979 and
driven inflation down from 13.5% to routine mid-single digits, handed the
chairmanship to Alan Greenspan in August. Inflation for the year came in at
3.6%, edging up as the expansion entered its fifth year and a weaker
dollar, following 1985’s Plaza Accord, pushed up the price of imported
goods. Then, on October 19, the stock market delivered Greenspan’s first
crisis: the Dow Jones Industrial Average fell 22.6% in a single session,
still the largest one-day percentage drop in its history, as computer-driven
“portfolio insurance” trading amplified a global sell-off that had started
days earlier. The Fed responded within 24 hours, publicly pledging to
supply whatever liquidity the banking system needed, and the panic did not
spread to the broader economy. Growth continued and unemployment kept
falling through the rest of the year. It was an early demonstration of what
became known as the “Greenspan put,” a Fed willing to move fast and loosen
policy to contain financial shocks even while still watching inflation,
that shaped central banking for the next two decades.
MLA: “Inflation from 1986 to 1987: $100 is worth $104 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1986-to-1987/
APA: InflationCalculator.com. Inflation from 1986 to 1987. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1986-to-1987/