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.
Year in review
Inflation in 1998
The U.S. inflation rate in 1998 was 1.6% (CPI: 163). Convert 1998 dollars to today →
1.6% 1998 inflation rate
3.0% 1990s average
1.7% peak month (May)
1.4% lowest month (Mar)
What things cost in 1998
In 1998, the median household income was $38,885, and a gallon of gas cost $1.06.
| Median household income | $38,885 |
|---|---|
| Gas (per gallon) | $1.06 |
| Median home price | $152,500 |
| First-class stamp | $0.32 |
| Federal minimum wage | $5.15 |
What $100 from 1998 was worth later
$100 from 1998 had the buying power of $204 by 2026; each milestone links to that conversion.
| In 2000 | $106 |
|---|---|
| In 2010 | $134 |
| In 2020 | $159 |
| In 2026 | $204 |
Inflation in 1998, month by month
| Month | CPI-U | 12-month rate |
|---|---|---|
| January | 161.6 | 1.6% |
| February | 161.9 | 1.4% |
| March | 162.2 | 1.4% |
| April | 162.5 | 1.4% |
| May | 162.8 | 1.7% |
| June | 163 | 1.7% |
| July | 163.2 | 1.7% |
| August | 163.4 | 1.6% |
| September | 163.6 | 1.5% |
| October | 164 | 1.5% |
| November | 164 | 1.5% |
| December | 163.9 | 1.6% |
Economic events of 1998
Russia devalues the ruble and defaults on its domestic debt in August; prices rose 1.6% that year.
- Russia devalues the ruble and defaults on its domestic debt in August The default rattled global markets already jittery from the Asian financial crisis, driving investors into safer assets and away from emerging-market debt.
- The hedge fund Long-Term Capital Management collapses in September LTCM's highly leveraged bets went bad in the aftermath of the Russian default, and the Federal Reserve organized a private-sector bailout by more than a dozen banks to prevent a broader unwinding of its roughly $100 billion in positions.
- The Federal Reserve cuts interest rates three times in the fall The cuts, in September, October, and November, were aimed at insuring the U.S. economy against the global financial turmoil following the Russian and Asian crises.
- Oil prices collapse, and gasoline averages its cheapest price of the decade A glut worsened by weak Asian demand pushed crude below $11 a barrel by December, and pump prices followed it down to a decade low.
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.