In 1985 Ronald Reagan was into his second term as President. Real GNP grew at an average rate of 3.2%. The average GDP growth, for the surrounding 30 years, was 3.5%. This was a slow down from 1984 which had been roughly double that rate. Industrial production was sluggish, at only 1.3% growth, when compared with 1984's 9.3% and the nation worried about our expanding trade deficit which reached 117.7 billion dollars in that year. Even though only 2.0% of that years GNP, this amount was up from 52.4, two years previous, in 1983.
Average per capita income rose from $13,571 in 1984 to $14,410 in 1985; a change of 6.2%. This gain was partially eroded by a 3.2% rise in consumer prices. Unemployment averaged 7.2% in 1985 with 8,237,000 people, from a civilian labor force of 115,461,000, out of work. Also of note in 1985 is the fact that the average household saved 9.2% of their personal income. Compare this with the last few years rate which ranges close to 1%.
Both the Fed. Funds rate, and the prime interest rate, were at seven year lows in 1985. The Fed Fund rate averaged 8.10%, down from a high of 16.39. The Prime rate averaged 9.93% and mortgages averaged around 12.42%.