$100 in 1986 is worth $113 in 1989,
because prices increased 13.1% over that period, an average of
4.20% a year.
$100 in 1986 has
the same buying power as
$113
in 1989
Detailed inflation statistics
Cumulative price change
13.1%
Average inflation rate
4.20% per year
Converted amount ($100 base)
$113
Price difference ($100 base)
$13.14
CPI in 1986
109.6
CPI in 1989
124
Inflation in 1986
1.86%
Inflation in 1989
4.82%
$100 in 1986 → 1989
$113
$100 in 1989 → 1986
$88.39
What happened to prices between 1986 and 1989
Between 1986 and 1989, the Consumer Price Index went from 109.6 to 124.
Cumulatively, prices increased 13.1%, which works out to an average of
4.20% per year. Put differently, a dollar in 1986 bought what
$0.88 buys in 1989: the 1986 dollar
lost 11.6% of its purchasing power over
these 3 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 1989 at the same ratio, 1.13: $1,000 becomes
$1,131, and $10,000 becomes $11,314.
Amount in 1986
Value in 1989
$1.00
$1.13
$5.00
$5.66
$10.00
$11.31
$20.00
$22.63
$50.00
$56.57
$100
$113
$500
$566
$1,000
$1,131
$5,000
$5,657
$10,000
$11,314
$100,000
$113,139
$1,000,000
$1,131,387
Inflation by spending category, 1986–1989
Between 1986 and 1989, medical care rose the most, up 22.4%, while energy rose the least, up 6.9%, against 13.1% for all items. The headline number is an average; here is what $100 of 1986
spending costs in 1989, by category:
Category
Avg. yearly inflation
$100 in 1986 →
All items (CPI-U)
4.20%
$113
Medical care
6.96%
$122
Food
4.70%
$115
Core (all items less food & energy)
4.36%
$114
Apparel
3.85%
$112
Transportation
3.71%
$112
Housing
3.51%
$111
Energy
2.25%
$107
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 $113 in 1989; each row shows the CPI, that
year's inflation rate, and the running value.
Within the span, inflation peaked at 4.8% in 1989, and the smallest rise was 3.6% in 1987.
In 1989, prices rose 4.8% and $100 from 1986 had the buying
power of $113; the year's average CPI of 124 is the level
behind every 1989 figure on this page.
1989 closed out a decade that began in economic crisis and ended in a long,
calmer expansion. Inflation for the year came in at 4.8%, higher than the
mid-decade lull but still roughly a third of the 13.5% peak that had opened
the decade in 1980. The federal minimum wage, unchanged at $3.35 an hour
since January 1981, had gone longer without an increase than at any point
since Congress created it, and had lost close to a third of its purchasing
power to inflation in the meantime; lawmakers would finally raise it to
$3.80 the following April. The decade’s other unfinished business came due
in August, when Congress passed FIRREA, the law that created the Resolution
Trust Corporation to seize and sell off the hundreds of savings and loan
institutions that a decade of deregulation and risky lending had left
insolvent, a bailout that eventually cost taxpayers over $100 billion. On
Wall Street, the recovery was already complete: the Dow Jones Industrial
Average closed 1989 at a record high, just over two years after Black
Monday’s 22.6% single-day crash, capping the bull market that had begun at
the Dow’s 776 low in August 1982. Between the S&L bailout, a wage floor
eroded by years without a raise, and a stock market at new highs, 1989
captured how unevenly the decade’s disinflation had been felt.
MLA: “Inflation from 1986 to 1989: $100 is worth $113 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1986-to-1989/
APA: InflationCalculator.com. Inflation from 1986 to 1989. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1986-to-1989/