The latest estimate of Social Security’s cost-of-living adjustment for 2025 rose to 3% after the government reported hotter-than-expected inflation in March, new calculations showed on Wednesday.
The higher COLA adjustment was the third this year following the reacceleration of inflation each month in 2024. The 2025 COLA estimate was 1.75% in January, and 2.4% in February.
The consumer price index (CPI), a broad measure of goods and services costs, rose 3.5% in March from a year earlier, according to government data reported on Wednesday. That’s up from 3.2% in February and more than the 3.4% average forecast from economists. So-called core rate, which strips out volatile food and energy prices, rose 3.8% on the year, flat from February but above predictions for 3.7%.
COLA is based on the subset “consumer price index for urban wage earners and clerical workers”, or CPI-W. That figure jumped from February to 3.5%, up from 3.1% in the prior reading and outpacing the 3.2% COLA Social Security recipients began receiving in January.
“That means older consumers are losing buying power,” said Mary Johnson, retired Social Security and Medicare Policy analyst.
Protect your assets: Best high-yield savings accounts of 2023
And, again, all the things seniors spend the most on saw some of the sharpest gains. Shelter rose 5.7% year-over-year and hospital services jumped 7.5%, the highest since October 2010, Bureau of Labor Statistics data showed. Transportation services soared 10.7% and…
