by Calculated Danger on 9/11/2024 04:02:00 PM
The BLS reported this morning:
The Shopper Value Index for City Wage Earners and Clerical Staff (CPI-W) elevated 2.4 % over the
final 12 months to an index degree of 308.640 (1982-84=100). For the month, the index was unchanged 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 very 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 very best Q3 common, so we solely have to match Q3 this yr to final yr.
Click on on graph for bigger picture.
This graph exhibits CPI-W since January 2000. The pink traces are the Q3 common of CPI-W for annually.
Word: 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 2.4% year-over-year in August, and though that is early – we want the info for July, August and September – my guess is COLA will most likely be round 2.4% this yr, the smallest improve since 1.3% in 2021.
Contribution and Profit Base
The contribution base will likely 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 obtainable 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 – that is an early look. What issues is common CPI-W, NSA, for all three months in Q3 (July, August and September).
