by Calculated Threat on 6/13/2024 02:01:00 PM
The BLS reported yesterday:
The Shopper Value Index for City Wage Earners and Clerical Staff (CPI-W) elevated 3.3 % over
the final 12 months to an index degree of 308.163 (1982-84=100). For the month, the index elevated 0.1
% 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 typical CPI-W for the three months in Q3 (July, August, September) and compares to the typical for the very best earlier common of Q3 months. Be aware: this isn’t the headline CPI-U and isn’t seasonally adjusted (NSA).
• In 2023, the Q3 common of CPI-W was 301.236.
The 2023 Q3 common was the very best Q3 common, so we solely have to check Q3 this yr to final yr.
Click on on graph for bigger picture.
This graph exhibits CPI-W since January 2000. The purple strains are the Q3 common of CPI-W for every year.
Be aware: The yr labeled is for the calculation, and the adjustment is efficient for December of that yr (acquired by beneficiaries in January of the next yr).
CPI-W was up 3.3% year-over-year in Might, and though that is very early – we’d like the info for July, August and September – my very early guess is COLA will in all probability be between 2.5% and three.0% this yr, the smallest improve since 1.3% in 2021.
Contribution and Profit Base
The contribution base might be adjusted utilizing the Nationwide Common Wage Index. That is primarily based on a one-year lag. The Nationwide Common Wage Index shouldn’t be out there for 2023 but, though we all know wages elevated solidly in 2023. If wages elevated 5% in 2023, then the contribution base subsequent yr will improve to round $177,000 in 2025, from the present $168,600.
Bear 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).
