The latest estimate of Social Security’s cost-of-living adjustment (COLA) for 2025 dipped to 2.6% after the government said inflation cooled a bit in July from June, new calculations showed Wednesday.
In July, the 2025 COLA forecast was 2.7%.
If COLA is 2.6% for 2025, that would be “considered the average amount that COLAs have been over the past two decades and the lowest since 2021,” said Mary Johnson, a retired analyst for the nonprofit Senior Citizens League who tracks and calculates the COLA estimates.
The consumer price index (CPI), a broad measure of goods and services costs, rose 2.9% in July from a year earlier, the government said on Thursday. That’s down from 3.0% in June, the lowest level since March 2021, and matching the consensus forecast from Barron’s. The so-called core rate, which strips out volatile food and energy prices, rose 3.2%, down from 3.3% in June and also in line with estimates. Both remain above the Federal Reserve’s 2% target.
COLA is based on the “consumer price index for urban wage earners and clerical workers,” or CPI-W. That figure rose 2.9%, unchanged from June and below the 3.2% COLA Social Security recipients began receiving in January.
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A dip in COLA would likely be bad news for seniors who have seen the items they spend the most money on continue to rise faster than their COLA, Johnson has said.
Rents have risen at a 5.1% clip over the past year, electricty 4.9%, hospital…
