Value of $100 in 1994, adjusted to 2019

What happened to prices between 1994 and 2019

Between 1994 and 2019, the Consumer Price Index went from 148.2 to 255.657. Cumulatively, prices increased 72.5%, which works out to an average of 2.21% per year. Put differently, a dollar in 1994 bought what $0.58 buys in 2019: the 1994 dollar lost 42.0% of its purchasing power over these 25 years.

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.

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The destination year: 2019

In 2019, prices rose 1.8% and $100 from 1994 had the buying power of $173; 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 →