by Calculated Threat on 8/14/2024 01:37:00 PM
The BLS reported this morning:
The Shopper Value Index for City Wage Earners and Clerical Staff (CPI-W) elevated 2.9 p.c over
the final 12 months to an index stage of 308.501 (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 Price-Of-Residing Changes (COLA). The calculation dates have modified over time (see Price-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 best earlier common of Q3 months. Word: 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 check 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 traces are the Q3 common of CPI-W for annually.
Word: The 12 months labeled is for the calculation, and the adjustment is efficient for December of that 12 months (obtained by beneficiaries in January of the next 12 months).
CPI-W was up 2.9% year-over-year in July, and though that is early – we want the info for July, August and September – my early guess is COLA will most likely be round 2.4% this 12 months, the smallest enhance since 1.3% in 2021.
Contribution and Profit Base
The contribution base will probably be adjusted utilizing the Nationwide Common Wage Index. That is based mostly 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 12 months will enhance to round $177,000 in 2025, from the present $168,600.
Keep in mind – that is an early look. What issues is common CPI-W, NSA, for all three months in Q3 (July, August and September).
