Value of $100 in 1995, adjusted to 2019

What happened to prices between 1995 and 2019

Between 1995 and 2019, the Consumer Price Index went from 152.4 to 255.657. Cumulatively, prices increased 67.8%, which works out to an average of 2.18% per year. Put differently, a dollar in 1995 bought what $0.60 buys in 2019: the 1995 dollar lost 40.4% of its purchasing power over these 24 years.

In 1995, gas averaged $1.15 a gallon, a new home cost roughly $133,900, and the median household earned about $34,100. Inflation ran at 2.8% for the year, little changed from 1994, as the Federal Reserve shifted from raising rates to cutting them. Having lifted its policy rate six times the year before, the Fed judged by July that the economy had cooled enough on its own, and trimmed rates instead, an outcome economists would later point to as a rare soft landing. The year opened with a currency crisis: Mexico’s peso lost roughly half its value against the dollar in a matter of weeks, and the U.S. Treasury and the IMF assembled a $50 billion rescue package, controversial in Congress, to stabilize it and keep the crisis from spreading to other emerging markets. Closer to home, a budget standoff between President Clinton and the Republican Congress shut down federal agencies twice, first for five days in November and then for 21 days spanning December into January 1996, the longest shutdown up to that point. The Postal Service raised the cost of a first-class stamp to 32 cents in January. Low, steady inflation was about the only calm part of 1995’s economic story.

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The destination year: 2019

In 2019, prices rose 1.8% and $100 from 1995 had the buying power of $168; 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.

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