Social Security COLA estimate for 2022 raised to 5.3%
It would be the largest increase since 2009, according to the Senior Citizens League, which produces the estimates.
The annual cost-of-living adjustment, or COLA, for Social Security benefits in 2022 — usually announced in October — could be 5.3%, the highest since 2009, based on Thursday’s Consumer Price Index announcement, according to Social Security and Medicare policy analyst Mary Johnson of The Senior Citizens League, who estimated the 2022 COLA at 4.7% a month ago.
The consumer price index in May rose 5% from 12 months earlier, which is the largest yearly gain since August 2008, the Labor Department reported Thursday. From April, the CPI grew 0.6%, representing the second-largest advance in over a decade.
The year-over-year figure surpassed the estimated 4.7% jump that economists surveyed by Dow Jones had anticipated.
May’s core CPI, which excludes food and energy, rose by a larger-than-forecast 0.7% from April and 3.8% from a year ago, the most since 1992, according to Bloomberg. For the past three months, this figure has increased at an annualized pace of 5.2%, which is the fastest since 1991.
Wells Fargo economists Sarah House and Shannon Seery said in a note that they “see signs of inflationary pressures broadening out, which we believe will keep monthly price gains from merely falling back to their pre-pandemic trend.”
Other experts agree. “While jump in used, new and rental car and truck prices lead recent CPI gains, shelter and owners’ equivalent rent prices are rising and will rise further following higher home prices,” economist Kathleen Bostjancic of Oxford Economics said in a Tweet Thursday. “While base effects fade, sticky goods prices and warming service prices keep inflation sticky.”
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