U.S. inflation rate in 1984: 4.32%

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Inflation in 1984 and Its Effect on Dollar Value

Purchasing power decreased by 4.32% in 1984 compared to the previous year, 1983. On average, you would have to spend 4.32% more money in 1984 than in 1983 for the same item.

In other words, $1 in 1983 is equivalent in purchasing power to $1.04 in 1984.

The 1983 inflation rate was 3.21%. The inflation rate in 1984 was 4.32%. The 1984 inflation rate is higher compared to the average inflation rate of 2.65% per year between 1984 and 2018.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1984 was 103.9. It was 99.6 in the previous year, 1983. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation.


Inflation from 1983 to 1984
Average inflation rate 4.32%
Converted amount ($1 base) $1.04
Price difference ($1 base) $0.04
CPI in 1983 99.600
CPI in 1984 103.900
Inflation in 1983 3.21%
Inflation in 1984 4.32%


U.S. Inflation since 1913
Annual Rate, U.S. Bureau of Labor Statistics CPI

Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1983 to 1984 (figures shown are purchasing power equivalents of $1):

San Francisco, California experienced the highest rate of inflation during the 1 years between 1983 and 1984 (5.65%).

Houston, Texas experienced the lowest rate of inflation during the 1 years between 1983 and 1984 (2.61%).

Note that some locations showing 0% inflation may have not yet reported latest data.


Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £1.00 in 1983 would be equivalent to £1.05 in 1984, an absolute change of £0.05 and a cumulative change of 4.98%.

In Canada, CA$1.00 in 1983 would be equivalent to CA$1.04 in 1984, an absolute change of CA$0.04 and a cumulative change of 3.72%.

Compare these numbers to the US's overall absolute change of $0.04 and total percent change of 4.32%.


Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. This chart shows the average rate of inflation for select CPI categories between 1983 and 1984.

Compare these values to the overall average of 4.32% per year:

Category Avg Inflation (%) Total Inflation (%) $1 in 1983 → 1984
Food 3.85 3.85 1.04
Shelter 4.90 4.90 1.05
Energy 0.99 0.99 1.01
Apparel 1.84 1.84 1.02
New vehicles 0.00 0.00 0.00
Used cars and trucks 0.00 0.00 0.00
Transportation services 0.00 0.00 0.00
Medical care services 6.01 6.01 1.06
Medical care commodities 7.32 7.32 1.07

It's important to note that not all categories may be tracked since 1983. This table and visualization use the earliest available data for each category.



How to Calculate Inflation Rate for $1, 1983 to 1984

This inflation calculator uses the following inflation rate formula:

CPI in 1984CPI in 1983
×
1983 USD value
=
1984 USD value

Then plug in historical CPI values. The U.S. CPI was 99.6 in the year 1983 and 103.9 in 1984:

103.999.6
×
$1
=
$1.04

$1 in 1983 has the same "purchasing power" or "buying power" as $1.04 in 1984.

To get the total inflation rate for the 1 years between 1983 and 1984, we use the following formula:

CPI in 1984 - CPI in 1983CPI in 1983
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

103.9 - 99.699.6
×
100
=
4%

Alternate Measurements of Inflation

The above data describe the CPI for all items. Also of note is the Core CPI, which measures inflation for all items except for the more volatile categories of food and energy. Core inflation averaged 5.12% per year between 1983 and 1984 (vs all-CPI inflation of 4.32%), for an inflation total of 5.12%.

When using the core inflation measurement, $1 in 1983 is equivalent in buying power to $1.05 in 1984, a difference of $0.05. Recall that for All Items, the converted amount is $1.04 with a difference of $0.04.

In 1983, core inflation was 3.91%.


Comparison to S&P 500 Index

To help put this inflation into perspective, if we had invested $1 in the S&P 500 index in 1983, our investment would be nominally worth approximately $1.30 in 1984. This is a return on investment of 29.90%, with an absolute return of $0.30.

These numbers are not inflation adjusted, so they are considered nominal. In order to evaluate the real return on our investment, we must calculate the return with inflation taken into account.

The compounding effect of inflation would account for 4.14% of returns ($0.01) during this period. This means the inflation-adjusted real return of our $1 investment is $0.29.

Investment in S&P 500 Index, 1983-1984
Original Amount Final Amount Change
Nominal $1 $1.30 29.90%
Real
Inflation Adjusted
$1 $0.29 28.66%


News headlines from 1983

Politics and news often influence economic performance. Here's what was happening at the time:

  • 26 million pounds in gold, diamonds and cash is stolen from Brink's-Mat warehouse at Heathrow Airport in London, which is considered to be one of the world's greatest robberies.
  • Ronald Reagan ends the United States embargo against Guatemala.

Data Source & Citation

Raw data for these calculations comes from the Bureau of Labor Statistics' (CPI), established in 1913. Inflation data from 1665 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University.

You may use the following MLA citation for this page: “Inflation Rate in 1984 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 15 Nov. 2018, https://www.officialdata.org/inflation-rate-in-1984.

in2013dollars.com is a reference website maintained by the Official Data Foundation.


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