$100 in 1989 is worth $120 in 1994,
because prices increased 19.5% over that period, an average of
3.63% a year.
$100 in 1989 has
the same buying power as
$120
in 1994
Detailed inflation statistics
Cumulative price change
19.5%
Average inflation rate
3.63% per year
Converted amount ($100 base)
$120
Price difference ($100 base)
$19.52
CPI in 1989
124
CPI in 1994
148.2
Inflation in 1989
4.82%
Inflation in 1994
2.56%
$100 in 1989 → 1994
$120
$100 in 1994 → 1989
$83.67
What happened to prices between 1989 and 1994
Between 1989 and 1994, the Consumer Price Index went from 124 to 148.2.
Cumulatively, prices increased 19.5%, which works out to an average of
3.63% per year. Put differently, a dollar in 1989 bought what
$0.84 buys in 1994: the 1989 dollar
lost 16.3% of its purchasing power over
these 5 years.
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.
Every 1989 amount converts to 1994 at the same ratio, 1.20: $1,000 becomes
$1,195, and $10,000 becomes $11,952.
Amount in 1989
Value in 1994
$1.00
$1.20
$5.00
$5.98
$10.00
$11.95
$20.00
$23.90
$50.00
$59.76
$100
$120
$500
$598
$1,000
$1,195
$5,000
$5,976
$10,000
$11,952
$100,000
$119,516
$1,000,000
$1,195,161
Inflation by spending category, 1989–1994
Between 1989 and 1994, medical care rose the most, up 41.3%, while energy rose the least, up 10.9%, against 19.5% for all items. The headline number is an average; here is what $100 of 1989
spending costs in 1994, by category:
Category
Avg. yearly inflation
$100 in 1989 →
All items (CPI-U)
3.63%
$120
Medical care
7.16%
$141
Core (all items less food & energy)
3.94%
$121
Housing
3.32%
$118
Transportation
3.31%
$118
Food
2.90%
$115
Apparel
2.38%
$112
Energy
2.09%
$111
Not shown because the BLS began these indexes after 1989: recreation (1993–), education & communication (1993–).
Decade by decade: 1989 to 1994
Prices climbed fastest in the 1980s, averaging 5.40% a year, and slowest in the 1990s (3.19% a year). Each step below chains into the full 1989–1994 change:
Years
Avg. yearly inflation
Price change
$100 from 1989, at end
1989–1990
5.40%
5.4%
$105
1990–1994
3.19%
13.4%
$120
Year by year: CPI and the value of $100 from 1989
$100 from 1989 had already become $110 by
1991, on its way to $120 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 1989 had the buying
power of $120; 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 1989 to 1994: $100 is worth $120 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1989-to-1994/
APA: InflationCalculator.com. Inflation from 1989 to 1994. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1989-to-1994/