$100 in 1986 is worth $108 in 1988,
because prices increased 7.9% over that period, an average of
3.89% a year.
$100 in 1986 has
the same buying power as
$108
in 1988
Detailed inflation statistics
Cumulative price change
7.9%
Average inflation rate
3.89% per year
Converted amount ($100 base)
$108
Price difference ($100 base)
$7.94
CPI in 1986
109.6
CPI in 1988
118.3
Inflation in 1986
1.86%
Inflation in 1988
4.14%
$100 in 1986 → 1988
$108
$100 in 1988 → 1986
$92.65
What happened to prices between 1986 and 1988
Between 1986 and 1988, the Consumer Price Index went from 109.6 to 118.3.
Cumulatively, prices increased 7.9%, which works out to an average of
3.89% per year. Put differently, a dollar in 1986 bought what
$0.93 buys in 1988: the 1986 dollar
lost 7.4% of its purchasing power over
these 2 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 1988 at the same ratio, 1.08: $1,000 becomes
$1,079, and $10,000 becomes $10,794.
Amount in 1986
Value in 1988
$1.00
$1.08
$5.00
$5.40
$10.00
$10.79
$20.00
$21.59
$50.00
$53.97
$100
$108
$500
$540
$1,000
$1,079
$5,000
$5,397
$10,000
$10,794
$100,000
$107,938
$1,000,000
$1,079,380
Inflation by spending category, 1986–1988
Between 1986 and 1988, medical care rose the most, up 13.6%, while energy rose the least, up 1.2%, against 7.9% for all items. The headline number is an average; here is what $100 of 1986
spending costs in 1988, by category:
Category
Avg. yearly inflation
$100 in 1986 →
All items (CPI-U)
3.89%
$108
Medical care
6.59%
$114
Apparel
4.39%
$109
Core (all items less food & energy)
4.27%
$109
Food
4.13%
$108
Housing
3.37%
$107
Transportation
3.08%
$106
Energy
0.62%
$101
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 1986 had already become $104 by
1987, on its way to $108 in 1988; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 4.1% in 1988, and the smallest rise was 3.6% in 1987.
In 1988, prices rose 4.1% and $100 from 1986 had the buying
power of $108; the year's average CPI of 118.3 is the level
behind every 1988 figure on this page.
By 1988, the economic expansion that began in the ashes of the 1981-82
recession was in its sixth year, and the Federal Reserve was watching for
signs it had run too long. Inflation rose to 4.1%, up from 3.6% the year
before, while unemployment fell to its lowest level since 1974. Alan
Greenspan’s Fed responded by raising the federal funds rate through the
year, from about 6.5% to 8.5%, trying to cool demand before prices
accelerated the way they had in the 1970s. Households still felt the
difference between this expansion and the last one: gas held near 90 cents
a gallon, almost exactly its 1987 price, and median household income rose
to roughly $27,200. The one price that moved was postage, which rose from
22 to 25 cents in April, the fourth increase of the decade but a far
gentler pace than the string of increases in the late 1970s and early
1980s. In November, Vice President George H.W. Bush won the presidency on
the strength of the expansion, promising in his nomination speech to hold
the line on taxes. Both the boom and that pledge would run into trouble
within two years, as the Fed’s rate increases helped tip the economy toward
the 1990-91 recession.
MLA: “Inflation from 1986 to 1988: $100 is worth $108 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1986-to-1988/
APA: InflationCalculator.com. Inflation from 1986 to 1988. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1986-to-1988/