The Department of Labor said Tuesday that Consumer Price Index (CPI) data reflected easing inflation, falling to 4% in May, or roughly half of what it was in 2022.
For that reason, the Senior Citizens League (TSCL) predicted a lower cost of living (COLA) adjustment for 2024.
TSCL, a fundraising, public education, and lobbying organization for public benefits that closely follows inflation and its COLA effects, noted that inflation is at its lowest level since March 2021, the date when historic price increases began their two-year run.
“Inflation continues to slow,” TSCL said. “The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the index that is used to determine the COLA, was up 3.6 percent year over year, the lowest level since March of 2021, when it was 3%. The average monthly rate of inflation continues to trend downward.”
As a result, it now estimates that the Social Security for 2024 could fall to 2.7%, significantly less than the 8.7% increase seen in 2023.
While an easing of the rise in inflation continues, consumers have yet to feel the effects.
According to an ongoing TSCL survey, older consumers, in particular, are reporting little improvement in their household spending yet.
Prices remain high in certain essential spending categories. Sixty-two percent of survey participants report food costs as their fastest-growing cost. Housing costs are the biggest concern of 22 percent of survey respondents. The survey has 2,275 respondents through June 6, 2023.
“Since January of this year, the actual inflation rate, as measured by the CPI-W, was lower than the amount older Americans received in their 8.7% COLAs,” TSCL explained. “That difference theoretically should provide a modest temporary improvement in buying power of roughly $52 per month for a retiree with average benefits of $1,694.00.”
However, it concluded that in 2021 and 2022, inflation was so severe that the average Social Security benefit fell behind by $1,054, leaving 53% of retirees doubting they would recover because household costs rose more than the dollar amount of their COLAs.
