$100 in 1988 is worth $125 in 1994,
because prices increased 25.3% over that period, an average of
3.83% a year.
$100 in 1988 has
the same buying power as
$125
in 1994
Detailed inflation statistics
Cumulative price change
25.3%
Average inflation rate
3.83% per year
Converted amount ($100 base)
$125
Price difference ($100 base)
$25.27
CPI in 1988
118.3
CPI in 1994
148.2
Inflation in 1988
4.14%
Inflation in 1994
2.56%
$100 in 1988 → 1994
$125
$100 in 1994 → 1988
$79.82
What happened to prices between 1988 and 1994
Between 1988 and 1994, the Consumer Price Index went from 118.3 to 148.2.
Cumulatively, prices increased 25.3%, which works out to an average of
3.83% per year. Put differently, a dollar in 1988 bought what
$0.80 buys in 1994: the 1988 dollar
lost 20.2% of its purchasing power over
these 6 years.
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.
Every 1988 amount converts to 1994 at the same ratio, 1.25: $1,000 becomes
$1,253, and $10,000 becomes $12,527.
Amount in 1988
Value in 1994
$1.00
$1.25
$5.00
$6.26
$10.00
$12.53
$20.00
$25.05
$50.00
$62.64
$100
$125
$500
$626
$1,000
$1,253
$5,000
$6,264
$10,000
$12,527
$100,000
$125,275
$1,000,000
$1,252,747
Inflation by spending category, 1988–1994
Between 1988 and 1994, medical care rose the most, up 52.2%, while apparel rose the least, up 15.6%, against 25.3% for all items. The headline number is an average; here is what $100 of 1988
spending costs in 1994, by category:
Category
Avg. yearly inflation
$100 in 1988 →
All items (CPI-U)
3.83%
$125
Medical care
7.26%
$152
Core (all items less food & energy)
4.04%
$127
Transportation
3.59%
$124
Housing
3.40%
$122
Food
3.38%
$122
Energy
2.67%
$117
Apparel
2.45%
$116
Not shown because the BLS began these indexes after 1988: recreation (1993–), education & communication (1993–).
Decade by decade: 1988 to 1994
Prices climbed fastest in the 1980s, averaging 5.11% a year, and slowest in the 1990s (3.19% a year). Each step below chains into the full 1988–1994 change:
Years
Avg. yearly inflation
Price change
$100 from 1988, at end
1988–1990
5.11%
10.5%
$110
1990–1994
3.19%
13.4%
$125
Year by year: CPI and the value of $100 from 1988
$100 from 1988 had already become $115 by
1991, on its way to $125 in 1994; 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 the smallest rise was 2.6% in 1994.
In 1994, prices rose 2.6% and $100 from 1988 had the buying
power of $125; the year's average CPI of 148.2 is the level
behind every 1994 figure on this page.
Gas averaged $1.11 a gallon in 1994, a new home cost roughly $130,000, and the median household
earned about $32,300. Inflation ran at 2.6% for the year, the calmest reading since the
mid-1980s, even as the Federal Reserve spent the year raising interest rates precisely to keep
it that way. Chair Alan Greenspan’s Fed lifted the federal funds rate from 3% to 5.5% over six
moves, a preemptive tightening campaign meant to head off inflation before it built rather than
react to it after the fact. The bond market, unprepared for such a rapid climb, sold off
sharply, and the higher rates rippled into places few had expected: Orange County, California,
whose investment pool had bet heavily on rates staying low, filed for bankruptcy in December
after losing an estimated $1.7 billion, the largest municipal bankruptcy in the country’s
history at the time. On the trade front, NAFTA took effect January 1, phasing out tariffs on
thousands of goods moving between the U.S., Mexico, and Canada, the start of a schedule that
would eliminate most remaining barriers over the following decade. It was a year that showed
inflation control could have its own costs, paid out in the bond market and, in Orange County’s
case, a bankruptcy court.
MLA: “Inflation from 1988 to 1994: $100 is worth $125 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1988-to-1994/
APA: InflationCalculator.com. Inflation from 1988 to 1994. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1988-to-1994/