Value of $100 in 1989, adjusted to 2019

What happened to prices between 1989 and 2019

Between 1989 and 2019, the Consumer Price Index went from 124 to 255.657. Cumulatively, prices increased 106.2%, which works out to an average of 2.44% per year. Put differently, a dollar in 1989 bought what $0.49 buys in 2019: the 1989 dollar lost 51.5% of its purchasing power over these 30 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.

More about inflation in 1989 →

The destination year: 2019

In 2019, prices rose 1.8% and $100 from 1989 had the buying power of $206; the year's average CPI of 255.657 is the level behind every 2019 figure on this page.

2019 was the last ordinary year before COVID-19. Consumer prices rose 1.8%, slightly under the Federal Reserve’s 2% target, with gasoline averaging $2.60 a gallon. Median household income jumped to $68,703, the highest on record up to that point, and the median new home sold for about $328,000. A first-class stamp rose to 55 cents.

The Fed reversed course. After four increases in 2018, it cut rates three times, to 1.50–1.75%, citing slower global growth, trade tensions, and low inflation. In July the expansion that began in June 2009 became the longest in U.S. records, and in August the yield curve briefly inverted, a signal investors read as a recession warning.

For workers at the bottom of the pay scale, 2019 marked a milestone of a different kind. The federal minimum wage stayed at $7.25 and reached its tenth year without an increase, the longest gap since the wage was first set. Because prices had climbed about 19% since it was last raised in 2009, its buying power was lower than at any point in that span.

More about inflation in 2019 →