$100 in 1989 is worth $127 in 1996,
because prices increased 26.5% over that period, an average of
3.42% a year.
$100 in 1989 has
the same buying power as
$127
in 1996
Detailed inflation statistics
Cumulative price change
26.5%
Average inflation rate
3.42% per year
Converted amount ($100 base)
$127
Price difference ($100 base)
$26.53
CPI in 1989
124
CPI in 1996
156.9
Inflation in 1989
4.82%
Inflation in 1996
2.95%
$100 in 1989 → 1996
$127
$100 in 1996 → 1989
$79.03
What happened to prices between 1989 and 1996
Between 1989 and 1996, the Consumer Price Index went from 124 to 156.9.
Cumulatively, prices increased 26.5%, which works out to an average of
3.42% per year. Put differently, a dollar in 1989 bought what
$0.79 buys in 1996: the 1989 dollar
lost 21.0% of its purchasing power over
these 7 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 1996 at the same ratio, 1.27: $1,000 becomes
$1,265, and $10,000 becomes $12,653.
Amount in 1989
Value in 1996
$1.00
$1.27
$5.00
$6.33
$10.00
$12.65
$20.00
$25.31
$50.00
$63.27
$100
$127
$500
$633
$1,000
$1,265
$5,000
$6,327
$10,000
$12,653
$100,000
$126,532
$1,000,000
$1,265,323
Inflation by spending category, 1989–1996
Between 1989 and 1996, medical care rose the most, up 52.8%, while apparel rose the least, up 11.0%, against 26.5% for all items. The headline number is an average; here is what $100 of 1989
spending costs in 1996, by category:
Category
Avg. yearly inflation
$100 in 1989 →
All items (CPI-U)
3.42%
$127
Medical care
6.25%
$153
Core (all items less food & energy)
3.63%
$128
Transportation
3.28%
$125
Housing
3.15%
$124
Food
2.95%
$123
Energy
2.24%
$117
Apparel
1.51%
$111
Not shown because the BLS began these indexes after 1989: recreation (1993–), education & communication (1993–).
Decade by decade: 1989 to 1996
Prices climbed fastest in the 1980s, averaging 5.40% a year, and slowest in the 1990s (3.09% a year). Each step below chains into the full 1989–1996 change:
Years
Avg. yearly inflation
Price change
$100 from 1989, at end
1989–1990
5.40%
5.4%
$105
1990–1996
3.09%
20.0%
$127
Year by year: CPI and the value of $100 from 1989
$100 from 1989 had already become $113 by
1992, on its way to $127 in 1996; 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 1996, prices rose 3.0% and $100 from 1989 had the buying
power of $127; the year's average CPI of 156.9 is the level
behind every 1996 figure on this page.
The median household earned about $35,500 in 1996, gas averaged $1.23 a gallon, up noticeably
from the mid-decade lull, and a new home cost roughly $140,000. Inflation ran at 3.0% for the
year, ticking back up from 1995 as energy prices firmed. Washington passed two of the decade’s
more consequential laws that year: in February, the Telecommunications Act rewrote the rules for
phone, cable, and broadcast media for the first time since 1934, opening local markets to
competition and easing ownership limits; in August, a welfare overhaul ended the federal
guarantee of cash assistance, replacing it with block grants to states and time limits on
benefits. In October, the federal minimum wage rose to $4.75 an hour, its first increase in five
years and the opening step of a two-part law that would take it to $5.15 the following
September. Two sweeping new laws and a minimum wage finally on the move again made 1996 a year
that changed more about how the economy was governed than about how fast prices moved.
MLA: “Inflation from 1989 to 1996: $100 is worth $127 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1989-to-1996/
APA: InflationCalculator.com. Inflation from 1989 to 1996. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1989-to-1996/