This morning it was announced that the Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) rose 8.5% in March compared to the same month last year, marking the fastest rise since December 1981 and following a 7.9% increase in February.
The March data triggered a quick recalculation of the estimated 2023 Social Security cost of living adjustment (COLA) from Mary Johnson, Social Security and Medicare policy analyst with The Senior Citizens League—and it’s a significant jump from her initial estimate just one month ago.
“With the latest CPI data through March I’m updating my estimate for the 2023 COLA to 8.9%,” Johnson told 401k Specialist on April 12. On March 11, Johnson said the CPI data pointed toward 7.6% COLA.
Were it to hold (the official COLA for 2023 will not be determined by the Social Security Administration until October), a 8.9% 2023 COLA would far eclipse the 5.9% COLA boost Social Security beneficiaries are receiving in 2022—the highest Social Security inflation adjustment in 40 years. The 2021 COLA was just 1.3%.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.2% in March on a seasonally adjusted basis after rising 0.8% in February.
Increases in the indexes for gasoline, shelter, and food were the largest contributors to the seasonally adjusted all items increase. The gasoline index rose 18.3% in March and accounted for over half of the all-items monthly increase; other energy component indexes also increased. The food index rose 1.0% and the food at home index rose 1.5%. The index for all items less food and energy rose 0.3% in March following a 0.5% increase the prior month. The shelter index was by far the biggest factor in the increase, with a broad set of other indexes also contributing, including those for airline fares, household furnishings and operations, medical care, and motor vehicle insurance.
In contrast, the index for used cars and trucks fell 3.8% over the month. The all-items less food and energy index rose 6.5%, the largest 12-month change since the period ending August 1982. The energy index rose 32.0% over the last year, and the food index increased 8.8%, the largest 12-month increase since the period ending May 1981.
The Senior Citizens League released the following table to illustrate how rising inflation is impacting Social Security benefits. The chart shows that what the average Social Security beneficiary is receiving each month is falling progressively further behind fast-rising inflation.
SEE ALSO:
• 2023 Social Security COLA: Another Major Increase Likely
• ‘Exploding’ Inflation Stressing Seniors Hampered by Tiny Social Security COLA