1984 was the year the recovery became a boom. Real GDP grew 7.2%, the fastest calendar-year growth since 1951, as the tax cuts passed in 1981 combined with falling interest rates and rebuilding consumer confidence. Unemployment, which had topped 10.8% just two years earlier, fell below 7.5%. Inflation ticked up to 4.3% from 3.2% the year before, but nothing close to a return of the 1970s wage-price spiral: the Federal Reserve under Paul Volcker kept policy tight enough to hold the line while growth ran hot. The strength of the expansion, branded “Morning in America” in President Reagan’s reelection campaign, carried him to a 49-state landslide over Walter Mondale that November, at the time the widest electoral-vote margin in U.S. history. For households, the numbers behind the slogan were concrete: median income rose to about $22,400, and a gallon of gas cost $1.13, roughly what it had cost three years earlier even as wages kept climbing. The contrast with 1980, when 13.5% inflation and interest rates near 20% had defined the economy, could not have been sharper.
Year in review
Inflation in 1984
The U.S. inflation rate in 1984 was 4.3% (CPI: 103.9). Convert 1984 dollars to today →
4.3% 1984 inflation rate
5.6% 1980s average
4.8% peak month (Mar)
3.9% lowest month (Dec)
What things cost in 1984
| Median household income | $22,415 |
|---|---|
| Gas (per gallon) | $1.13 |
| Median home price | $79,900 |
| First-class stamp | $0.20 |
| Federal minimum wage | $3.35 |
What $100 from 1984 was worth later
| In 1990 | $126 |
|---|---|
| In 2000 | $166 |
| In 2010 | $210 |
| In 2020 | $249 |
| In 2026 | $319 |
Inflation in 1984, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 101.9 | 4.2% |
| February | 102.4 | 4.6% |
| March | 102.6 | 4.8% |
| April | 103.1 | 4.6% |
| May | 103.4 | 4.2% |
| June | 103.7 | 4.2% |
| July | 104.1 | 4.2% |
| August | 104.5 | 4.3% |
| September | 105 | 4.3% |
| October | 105.3 | 4.3% |
| November | 105.3 | 4.1% |
| December | 105.3 | 3.9% |
Economic events of 1984
- The economy grows 7.2%, the fastest calendar-year growth since 1951 Tax cuts from 1981's Economic Recovery Tax Act, falling interest rates, and rebuilding consumer confidence fed what commentators called "Morning in America." Unemployment fell below 7.5% for the first time since 1980.
- Inflation ticks up to 4.3% but stays well below Great Inflation levels The modest rise, from 3.2% the year before, reflected the strength of the recovery rather than a return to the wage-price spiral of the 1970s. The Fed, with Paul Volcker still chairman, kept policy tight enough to prevent a repeat.
- Reagan wins reelection in a landslide, carrying 49 states With inflation down to a fraction of 1980's rate and unemployment falling, the economic recovery became the centerpiece of the campaign against Walter Mondale. It was, at the time, the widest electoral-vote margin in U.S. history.
Sources: U.S. Census Bureau, Current Population Survey (income); U.S. Census Bureau, New Residential Sales (home price); U.S. Energy Information Administration (gasoline); U.S. Department of Labor (minimum wage); USPS historical rates.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages. See the methodology.