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 Employees (CPI-W) elevated 3.3 p.c over
the final 12 months to an index degree of 308.163 (1982-84=100). For the month, the index elevated 0.1
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 2023, the Q3 common of CPI-W was 301.236.
The 2023 Q3 common was the best Q3 common, so we solely have to match Q3 this 12 months to final 12 months.
Click on on graph for bigger picture.
This graph exhibits CPI-W since January 2000. The crimson strains are the Q3 common of CPI-W for every year.
Observe: The 12 months labeled is for the calculation, and the adjustment is efficient for December of that 12 months (acquired by beneficiaries in January of the next 12 months).
CPI-W was up 3.3% year-over-year in Could, and though that is very early – we want 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 12 months, the smallest improve since 1.3% in 2021.
Contribution and Profit Base
The contribution base shall be adjusted utilizing the Nationwide Common Wage Index. That is based mostly on a one-year lag. The Nationwide Common Wage Index just isn’t obtainable for 2023 but, though we all know wages elevated solidly in 2023. If wages elevated 5% in 2023, then the contribution base subsequent 12 months will improve to round $177,000 in 2025, from the present $168,600.
Bear in mind – it is a very early look. What issues is common CPI-W, NSA, for all three months in Q3 (July, August and September).
