$100 in 1987 is worth $104 in 1988,
because prices increased 4.1% over that period, an average of
4.14% a year.
$100 in 1987 has
the same buying power as
$104
in 1988
Detailed inflation statistics
Cumulative price change
4.1%
Average inflation rate
4.14% per year
Converted amount ($100 base)
$104
Price difference ($100 base)
$4.14
CPI in 1987
113.6
CPI in 1988
118.3
Inflation in 1987
3.65%
Inflation in 1988
4.14%
$100 in 1987 → 1988
$104
$100 in 1988 → 1987
$96.03
What happened to prices between 1987 and 1988
Between 1987 and 1988, the Consumer Price Index went from 113.6 to 118.3.
Cumulatively, prices increased 4.1%, which works out to an average of
4.14% per year. Put differently, a dollar in 1987 bought what
$0.96 buys in 1988: the 1987 dollar
lost 4.0% of its purchasing power over
these 1 years.
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.
Every 1987 amount converts to 1988 at the same ratio, 1.04: $1,000 becomes
$1,041, and $10,000 becomes $10,414.
Amount in 1987
Value in 1988
$1.00
$1.04
$5.00
$5.21
$10.00
$10.41
$20.00
$20.83
$50.00
$52.07
$100
$104
$500
$521
$1,000
$1,041
$5,000
$5,207
$10,000
$10,414
$100,000
$104,137
$1,000,000
$1,041,373
Inflation by spending category, 1987–1988
Between 1987 and 1988, medical care rose the most, up 6.5%, while energy rose the least, up 0.8%, against 4.1% for all items. The headline number is an average; here is what $100 of 1987
spending costs in 1988, by category:
Category
Avg. yearly inflation
$100 in 1987 →
All items (CPI-U)
4.14%
$104
Medical care
6.53%
$107
Core (all items less food & energy)
4.40%
$104
Apparel
4.34%
$104
Food
4.14%
$104
Housing
3.77%
$104
Transportation
3.13%
$103
Energy
0.79%
$101
Not shown because the BLS began these indexes after 1987: recreation (1993–), education & communication (1993–).
Year by year: CPI and the value of $100 from 1987
$100 from 1987grew to $104 by 1988; each row
shows the CPI, that year's inflation rate, and the running value.
In 1988, prices rose 4.1% and $100 from 1987 had the buying
power of $104; 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 1987 to 1988: $100 is worth $104 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1987-to-1988/
APA: InflationCalculator.com. Inflation from 1987 to 1988. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1987-to-1988/