(The Hill) — Social Security recipients will see a 2.5 percent bump as part of their cost-of-living adjustment (COLA) for 2025.
The increase announced Thursday marks the smallest in years and is in line with expertsโ expectations as inflation has eased some.ย Millions of recipients saw their biggest increase at 8.7 percent last year following decades-high inflation during the pandemic.
In the Labor Departmentโs latest inflation reading released shortly before the COLA announcement, consumer prices saw a 0.2 increase last month and rose 2.4 percent annually.
The agencyโs Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the inflation gauge thatโs factored into annual COLA calculations, also showed a 2.2 increase over the past year on Thursday.
Jason Fichtner, chief economist for the Bipartisan Policy Center, said Thursday that price stability โgood for todayโs beneficiaries,โ but he cautioned that โthe biggest threat to seniorsโ financial securityโthe depletion of Social Securityโs trust fundโis looming.โ
โIf lawmakers fail to act, in less than a decade each and every beneficiary will face an automatic and immediate benefit cut of over 20 percent. The longer Congress delays, the bigger the Trust Fund shortfall becomes. With a new Congress and administration, next year is the time to find the bipartisan will to act.โ
The recent figures follow weeks after the Federal Reserve cut interest rates for the first time in years. The move was seen as a show of confidence by the central bank in its relentless fight to tamp down inflation.
In newly released minutes of the latest meeting held by the bodyโs interest rate-setting committee, bankers signaled confidence in the nationโs economic outlook.
