$100 in 1989 is worth $131 in 1998,
because prices increased 31.5% over that period, an average of
3.09% a year.
$100 in 1989 has
the same buying power as
$131
in 1998
Detailed inflation statistics
Cumulative price change
31.5%
Average inflation rate
3.09% per year
Converted amount ($100 base)
$131
Price difference ($100 base)
$31.45
CPI in 1989
124
CPI in 1998
163
Inflation in 1989
4.82%
Inflation in 1998
1.56%
$100 in 1989 → 1998
$131
$100 in 1998 → 1989
$76.07
What happened to prices between 1989 and 1998
Between 1989 and 1998, the Consumer Price Index went from 124 to 163.
Cumulatively, prices increased 31.5%, which works out to an average of
3.09% per year. Put differently, a dollar in 1989 bought what
$0.76 buys in 1998: the 1989 dollar
lost 23.9% of its purchasing power over
these 9 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 1998 at the same ratio, 1.31: $1,000 becomes
$1,315, and $10,000 becomes $13,145.
Amount in 1989
Value in 1998
$1.00
$1.31
$5.00
$6.57
$10.00
$13.15
$20.00
$26.29
$50.00
$65.73
$100
$131
$500
$657
$1,000
$1,315
$5,000
$6,573
$10,000
$13,145
$100,000
$131,452
$1,000,000
$1,314,516
Inflation by spending category, 1989–1998
Between 1989 and 1998, medical care rose the most, up 62.2%, while energy rose the least, up 9.1%, against 31.5% for all items. The headline number is an average; here is what $100 of 1989
spending costs in 1998, by category:
Category
Avg. yearly inflation
$100 in 1989 →
All items (CPI-U)
3.09%
$131
Medical care
5.52%
$162
Core (all items less food & energy)
3.34%
$134
Housing
2.99%
$130
Food
2.82%
$128
Transportation
2.43%
$124
Apparel
1.28%
$112
Energy
0.97%
$109
Not shown because the BLS began these indexes after 1989: recreation (1993–), education & communication (1993–).
Decade by decade: 1989 to 1998
Prices climbed fastest in the 1980s, averaging 5.40% a year, and slowest in the 1990s (2.80% a year). Each step below chains into the full 1989–1998 change:
Years
Avg. yearly inflation
Price change
$100 from 1989, at end
1989–1990
5.40%
5.4%
$105
1990–1998
2.80%
24.7%
$131
Year by year: CPI and the value of $100 from 1989
$100 from 1989 had already become $117 by
1993, on its way to $131 in 1998; 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 1.6% in 1998.
In 1998, prices rose 1.6% and $100 from 1989 had the buying
power of $131; the year's average CPI of 163 is the level
behind every 1998 figure on this page.
The median household earned about $38,900 in 1998, gas averaged just $1.06 a gallon, its
cheapest of the decade, and a new home cost roughly $152,500. Inflation ran at 1.6% for the
year, the lowest of the 1990s, as a glut of crude oil, worsened by weak demand from Asia’s
slowdown, pushed prices below $11 a barrel by December and pulled pump prices down with them.
The calm at home came alongside real turmoil abroad: in August, Russia devalued the ruble and
defaulted on its domestic debt, rattling markets already unsettled by the Asian financial
crisis, and in September the hedge fund Long-Term Capital Management collapsed after its highly
leveraged bets went bad, prompting the Federal Reserve to organize a private-sector bailout by
more than a dozen banks to prevent a disorderly unwinding of its roughly $100 billion in
positions. The Fed also cut interest rates three times that fall, in September, October, and
November, an insurance policy against the global financial turmoil spreading to the U.S.
economy. Cheap oil and a well-timed set of rate cuts left 1998 as a year the U.S. economy
absorbed two foreign financial crises without much of a dent at home.
MLA: “Inflation from 1989 to 1998: $100 is worth $131 today.” InflationCalculator.com, U.S. Bureau of Labor Statistics CPI-U data, https://inflationcalculator.com/inflation/1989-to-1998/
APA: InflationCalculator.com. Inflation from 1989 to 1998. Based on U.S. Bureau of Labor Statistics CPI-U data. Retrieved from https://inflationcalculator.com/inflation/1989-to-1998/