by Calculated Danger on 7/15/2025 04:06:00 PM
The BLS reported earlier at this time:
The Client Worth Index for City Wage Earners and Clerical Staff (CPI-W) elevated 2.6 p.c over the past 12 months to an index stage of 315.945 (1982-84=100). For the month, the index elevated 0.4 p.c previous to seasonal adjustment.
CPI-W is the index that’s used to calculate the Value-Of-Residing Changes (COLA). The calculation dates have modified over time (see Value-of-Residing Changes), however the present calculation makes use of the common CPI-W for the three months in Q3 (July, August, September) and compares to the common for the best earlier common of Q3 months. Observe: this isn’t the headline CPI-U and isn’t seasonally adjusted (NSA).
• In 2024, the Q3 common of CPI-W was 308.729.
The 2024 Q3 common was the best Q3 common, so we solely have to check Q3 this yr to final yr.
Click on on graph for bigger picture.
This graph reveals CPI-W since January 2000. The crimson traces are the Q3 common of CPI-W for annually.
Observe: The yr labeled is for the calculation, and the adjustment is efficient for December of that yr (obtained by beneficiaries in January of the next yr).
CPI-W was up 2.6% year-over-year in June (up from 2.2% YoY in Could), and though that is very early – we want the information for July, August and September – my early guess is COLA will in all probability be in 3% vary this yr, up from 2.5% in 2025.
Contribution and Profit Base
The contribution base will probably be adjusted utilizing the Nationwide Common Wage Index. That is primarily based on a one-year lag. The Nationwide Common Wage Index just isn’t obtainable for 2024 but, though we all know wages elevated solidly in 2024. If wages elevated 5% in 2024, then the contribution base subsequent yr will improve to round $185,000 in 2026, from the present $176,100.
Keep in mind – this can be a very early look. What issues is common CPI-W, NSA, for all three months in Q3 (July, August and September).
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