Latest news with #CPI-U
Fibre2Fashion
3 days ago
- Business
- Fibre2Fashion
CPI-U for apparel in US up 0.4% MoM in June
Pic: ACHPF / The US consumer price index for all urban consumers (CPI-U) increased by 0.3 per cent month on month (MoM) on a seasonally-adjusted basis in June this year after rising by 0.1 per cent MoM in May, according to the Bureau of Labour Statistics (BLS). It increased by 2.7 per cent year on year (YoY) before seasonal adjustment after a 2.4-per cent YoY rise in May. The energy index rose by 0.9 per cent MoM in the month after falling by 1 per cent MoM in May, while it decreased by 0.8 per cent YoY. The US CPI for all urban consumers rose by 0.3 per cent month on month (MoM) on a seasonally-adjusted basis in June. It rose by 2.7 per cent YoY before seasonal adjustment in the month. The apparel index increased by 0.4 per cent MoM and fell by 0.5 per cent YoY (unadjusted) in June. The energy index rose by 0.9 per cent MoM in the month, while it decreased by 0.8 per cent YoY. The index for all items less food and energy rose by 0.2 per cent MoM and 2.9 per cent YoY in June, following a 0.1-per cent MoM increase in May. The apparel index in the country increased by 0.4 per cent MoM and fell by 0.5 per cent YoY (unadjusted) in June, a BLS release said. Fibre2Fashion News Desk (DS)
Yahoo
4 days ago
- Business
- Yahoo
Social Security's 2026 COLA Could Be the Worst in Years, but Millions of Retirees Will Get a Big Financial Boost Anyway
The 2026 annual cost-of-living adjustment (COLA) could come in light again based on recent data. As inflation has slowed, COLAs have come down in recent years. However, millions of retirees who are at least 65 should see significant savings from recent legislation. The $23,760 Social Security bonus most retirees completely overlook › Each year, millions of retirees wait anxiously for the Social Security Administration (SSA) to announce the new annual cost-of-living adjustment (COLA). The COLA determines how much Social Security benefits will increase the following year and helps retirees, many of whom rely on Social Security for all or a significant part of their income, budget for the following year. While it's still months before the 2026 COLA is announced, recent data suggests retirees could be looking at the lowest COLA in years. However, millions of retirees will get a big financial boost anyway. The COLA is always determined based on inflation data from the third quarter of each year. Unlike the broader market, which relies heavily each month on the Consumer Price Index for All Urban Consumers (CPI-U), the SSA relies on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). While the CPI measures the change in prices for 93% of the U.S. population, the CPI-W only covers about 29% of the population and measures expenses more common to the blue-collar workforce. To calculate the following year's COLA, the SSA looks at the year-over-year percentage change for the average CPI-W in July, August, and September. Here are the last four COLAs: 2022: 5.9% 2023: 8.7% 2024: 3.2% 2025: 2.5% In recent months, data has pointed to slowing inflation. The monthly year-over-year change in the CPI-W has gone from 2.97% in January to 2.17% in May. There's still time before the data that actually counts toward the COLA comes into play, and factors like tariffs have the potential to make inflation change course. But if the CPI-W stays on its current trajectory, retirees are looking at the worst COLA in five years. COLAs are a bit of a double-edged sword because retirees also benefit from a cheaper cost of living, but many argue that COLAs have not been able to keep pace with inflation since the turn of the century. Recently, another factor will come into play that's going to help people who are at least 65 years old: President Donald Trump's "big, beautiful bill," a large budget reconciliation package. The primary goal of the legislation is to pass trillions in tax cuts and allocate funds for border security, but such a large bill includes many other provisions. The big one for retirees is a $6,000 additional senior tax deduction, or $12,000 for joint filers. To be clear, this is not aimed specifically at retirees collecting Social Security but anyone who is 65 or older, regardless of whether or not they receive Social Security benefits. To be eligible for the full deduction, single filers can make no more than $75,000, while joint filers can make no more than $150,000. The deduction completely phases out at $175,000 for single filers and $250,000 for joint filers. According to an analysis conducted by the White House's Council of Economic Advisers, the bonus deduction stands to benefit millions of Americans who receive Social Security benefits and pay taxes on them. Citing U.S. Treasury data, the Council found there were 58.5 million people age 65 and over receiving Social Security benefits in 2024. Of this group, 37.4 million received exemptions and deductions that exceeded their taxable Social Security income. With the new bonus deduction, this number will jump by over 14 million to 51.4 million, representing 88% of beneficiaries who are 65 or older and receiving Social Security. The deduction is temporary. It will go into effect next year (for the 2025 tax bill) and last through the 2028 year's taxes. The tax savings for a married couple with $100,000 of income could be roughly $1,600 per year, according to The Wall Street Journal. The average monthly benefit of a retired worker in May was $2,002, or about $24,024 a year. Assuming both people in a marriage receive that benefit (for a total of $48,048), the savings will amount to roughly 3.3% of the married couple's combined average benefits. That is equal to the average COLA since 1975 and above the average 2.6% COLA since the turn of the century. Remember, these savings are in addition to the 2026 COLA, whatever it ends up being. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Social Security's 2026 COLA Could Be the Worst in Years, but Millions of Retirees Will Get a Big Financial Boost Anyway was originally published by The Motley Fool
USA Today
30-06-2025
- Business
- USA Today
Social Security COLA 2026: Why your raise could be smaller than expected
Millions of older Americans today collect Social Security. For some seniors, Social Security represents only part of their income. But many retirees live only or mostly on Social Security, creating a situation where the program's annual cost-of-living adjustments, or COLAs, become all the more important. The purpose of Social Security COLAs is to help beneficiaries maintain their buying power from one year to the next. Social Security COLAs are tied directly to changes in inflation. When inflation rises from one year to another, benefits go up. When there's no increase in inflation, or when there's a decrease, Social Security benefits stay don't get a COLA (but thankfully, they also don't go down). At this point, many Social Security recipients are eager to know what 2026's COLA will amount to. In 2025, benefits got a 2.5% COLA. Many older Americans are hoping that 2026's COLA will be larger, or at the very least, the same. But there may be a challenge in calculating next year's COLA that results in a lower raise for Social Security recipients. And it's something seniors need to prepare for. How Social Security COLAs are calculated Many people know that Social Security COLAs are based on inflation, but it's a bit more nuanced than that. COLAs are based on third quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a subset of the Consumer Price Index for All Urban Consumers (CPI-U). In a nutshell, the CPI-U tracks changes in the cost of common goods and services. The CPI-W is similar but differs in the specific population it tracks (urban wage earners and clerical workers). Senior advocates have tried to get lawmakers to change the way Social Security COLAs are calculated — essentially, because the CPI-W is not a very accurate measure of the costs beneficiaries tend to face. The typical Social Security recipient is not a clerical worker or urban wage earner, so the fact that this specific index is used for COLA purposes makes little sense to some. However, lawmakers have not exactly been rushing to make a change. Why Social Security recipients could get shorted in 2026 The Senior Citizens League, an advocacy group, recently announced that based on inflation readings to date, 2026's Social Security COLA could come in at 2.5%. That's the exact same COLA beneficiaries received at the start of 2025. However, the Senior Citizens League also flagged a big issue. Citing The Wall Street Journal, it said that a hiring freeze at the Bureau of Labor Statistics has limited the amount of price data the agency can collect. If the CPI-W doesn't have a complete set of data, it could result in an even smaller Social Security COLA than seniors should be entitled to in 2026. Of course, it's possible that incomplete data could work in seniors' favor. But there's no way to know. And also, if the CPI-W is going to continue to be the measure for calculating COLAs, it should at least have accurate data. If that doesn't happen this year, seniors could be out of luck. The Social Security Administration will be not be able to announce a 2026 COLA until October. But seniors who rely on those annual raises may have to brace for a disappointing number. Those who can't afford a stingy raise should make changes now, whether it's reducing spending, getting a part-time job, or both. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. The $23,760 Social Security bonus most retirees completely overlook Offer from the Motley Fool: If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets"could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. JoinStock Advisorto learn more about these strategies. View the "Social Security secrets" »
Yahoo
24-06-2025
- Business
- Yahoo
Will President Trump's Tariffs Inadvertently Boost the 2026 Social Security COLA?
It looks like actions by the Trump administration will result in some level of tariffs on most countries. Many economists expect tariffs to boost inflation to some degree. Higher inflation is generally considered bad, but it can be a good thing when it comes to Social Security benefits. The $23,760 Social Security bonus most retirees completely overlook › President Donald Trump imposed sweeping "reciprocal" tariffs on all of the United States' largest trading partners in early April. A 90-day pause on most of these tariffs followed in mid-April to give the countries time to negotiate individual trade deals. However, Trump still set a base tariff level of 10% for everyone except China. Roughly 75 days into the pause, very few trade deals have actually been signed, and the 10% base tariffs remain (even for countries that signed deals), suggesting that some level of tariffs is here to stay as long as President Trump is in charge. Many experts argue that tariffs will result in higher levels of inflation. Coincidentally, inflation is used to calculate Social Security's annual cost-of-living-adjustment (COLA). The speculation is that the rise in inflation will result in a larger-than-expected COLA boost in 2026. Given that tariffs have not been this high for some time (and have never been this high across so many countries), we are in a bit of uncharted territory. There is some dispute over how much impact tariffs will have on inflation, and complications like a slowing economy or recession make coming up with accurate predictions even harder. Here are some thoughts on how tariffs could lead to higher-than-expected Social Security benefits in 2026 to help you prepare for whatever ends up happening. Since surging to 9.1% at its peak in June 2022, the annualized rate of inflation has fallen significantly, coming in at 2.4% in May, according to the U.S. Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers (CPI-U). That rate isn't far off from the Federal Reserve's mandated goal of maintaining a 2% annualized rate of inflation. Many experts are concerned that tariffs, which are an excise tax on imports, are likely to initially boost inflation in the first year they are enacted (before potentially settling into a new, higher standard). The simple thesis is that if companies have to pay a tax to sell certain goods brought in from other countries to the U.S., they will pass as much of that cost onto the consumer as they can, leading to higher prices. So far, there has been little effect from these new tariffs on inflation, but that could be deceptive. Economists think the impact of tariffs will eventually be felt by consumers. "We believe the limited impact from tariffs in May is a reflection of pre-tariff stockpiling, as well as a lagged pass-through of tariffs into import prices," Nomura's senior economist Aichi Amemiya wrote in a recent research note, reported on by CNBC. "We maintain our view that the impact of tariffs will likely materialize in the coming months." RSM's Chief Economist, Joseph Brusuelas, according to CNBC, offered up his own research note that says he's already seeing evidence of tariffs beginning to hit prices. Recent data shows higher prices for products frequently imported, such as canned fruits and vegetables, coffee, tobacco, durable goods, and some major appliances. The report said the price spikes in appliances mirrored those seen in 2018-2020 when President Trump last levied tariffs during his first administration. The indications are that tariff rates for certain countries will end up being far higher than expected. For instance, tariffs on Chinese goods are now at 55% following a tentative deal reached between the two countries. That rate includes the 25% tariffs put on China in Trump's first term. Tariffs on Vietnam could land in the 20% to 25% range. These rates are lower than the punitive tariff rates initially imposed on "Liberation Day" but still higher than at any time in modern history. A key part of the Social Security program is the annual COLA. The COLA is intended to help benefits keep pace with inflation, although many would argue it has not achieved this goal for some time. Regardless, the COLA typically increases benefits each year unless inflation is zero or prices actually decrease. Given that the goal of the COLA is to keep pace with inflation, the annual COLA is determined based on inflation data. The Social Security Administration (SSA) uses data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to determine the COLA. The SSA specifically uses the data from the third quarter of the year, which includes the months of July, August, and September. The SSA takes the year-over-year percentage difference of the CPI-W in each of these three months and then averages the three numbers together to arrive at the COLA. For 2025, the annual COLA was 2.5%. Here are the year-over-year percentage differences in the CPI-W for each month so far in 2025: January 3% February 2.7% March 2.2% April 2.1% May 2.2% As you can see, inflation per the CPI-W has been trending lower. If this trend continues, retirees are looking at a smaller COLA next year than this year. But if inflation reverts higher, the COLA would reverse course, too, which would put more money in the pockets of retirees claiming Social Security. Of course, the COLA can be a bit of a double-edged sword because a higher COLA also likely means a higher cost of living and vice versa. While many experts are projecting higher inflation from tariffs, there's no guarantee that actually comes to fruition. Remember, inflation data has continued to come in soft and it's possible that higher consumer prices get offset by slower growth. For this reason, retirees should not bank on a higher COLA yet and continue to budget for about a 2% COLA in 2026 based on recent CPI-W data. That way if the COLA does come in better than expected, retirees will have a little surplus for their budgets next year. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Will President Trump's Tariffs Inadvertently Boost the 2026 Social Security COLA? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
10-06-2025
- Business
- Miami Herald
Looming inflation data may rock interest rate cut forecasts
New inflation numbers are on the horizon, prompting speculation as to their role in the U.S. economic chaos rattling Wall Street and Main Street. Post-pandemic interest rates on everything from small business loans to consumer credit cards to home mortgages are kicking up the same concern: Too darn high. Related: Jobs report shifts Fed interest rate forecasts Market participants remain downbeat about interest rate cut chances despite President Trump's multiple escalating demands directed at Federal Reserve Board Chair Jerome Federal Reserve sets monetary policy to target low inflation and unemployment. This dual mandate is often at odds because higher interest rates lower inflation but increase job losses, while lower interest rates lower unemployment but increase inflation. Consumer Price Index for All Urban Consumers (CPI-U) increased 2.3% for the 12 months ending April 2025, after rising 2.4% over the same period in March. The April change was the smallest 12-month increase in the all items index since February 2021, according to the Bureau of Labor Statistics. Related: Fed Chair hit with savage message on interest rates Most recently, the president said he wanted to see a full 1% cut in the Federal Funds Rate, currently between 4.25 and 4.50%, the actual interest rate at which depository institutions trade federal funds with each other overnight. Trump maintains that high interest rates are causing dire concern-and, in some cases, despair-among investors, businesses, and consumers. A higher Fed Funds Rate means higher Treasury bond yields. Banks use Treasury yields to set auto, credit card, and mortgage interest rates. Many economic experts say 2025's whiplash trade wars, fueled by Trump's tariff games, are leading the economy into a dangerous landing. Some speculate that a recession or even stagflation could be ahead in the last two quarters of 2025. More Economic Analysis: Hedge-fund manager sees U.S. becoming GreeceA critical industry is slamming the economyReports may show whether the economy is toughing out the tariffs The CME's highly-watched FedWatch tool showed a decline in odds of an interest rate cut this summer. Thus, the odds of the Fed cutting interest rates in the second half of 2025 will increase if next week's May CPI and PPI data support the "May inflation data we've seen thus far, and there is no meaningful progress on trade deals,' according to TheStreet's Chris Versace. May Labor Department figures on jobs were slightly higher than expected but down from April. This soft jobs report led Fed watchers to turn to the CPI as a harbinger of potential Fed action, including a possible quarter-point cut this summer that would serve as the only rate deduction for the year. The May CPI numbers will be released at 8:30 a.m. June 11. If that figure is lower or higher than expected, it will likely reset interest rate predictions again. Related: Veteran fund manager revamps stock market forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
