In a recent discussion on The Claman Countdown, Jack Janasiewicz, the lead portfolio strategist at Natixis Investment Managers, examined the implications of the latest jobs data, the market’s response, and shared insights on advancements in artificial intelligence (A.I.).
This conversation comes on the heels of a report indicating that Social Security beneficiaries are likely to see a significant cost of living adjustment (COLA) next year, spurred by persistent inflationary pressures. The adjustment is calculated based on a variant of the Consumer Price Index (CPI), focusing on average annual inflation figures for the months of July, August, and September. Consequently, the finalized COLA for 2026 will be disclosed following the release of September’s CPI data in mid-October.
According to the Bureau of Labor Statistics, the consumer price index for August revealed a rise in headline inflation from 2.8% in July to 2.9% on a year-over-year basis. The August CPI also increased by 0.4% compared to the previous month. Given these developments, The Senior Citizens League (TSCL) has estimated that Social Security’s COLA will be around 2.7% when announced next month. This adjustment would result in an increase of $54 in the average monthly benefit for retired workers, elevating it from $2,008 to $2,062.
TSCL’s projection reflects a notable revision from earlier this year, where it anticipated a 2.1% COLA based on inflation trends that have ultimately surpassed expectations. A 2.7% adjustment would mark a return to roughly historical averages, as COLAs have averaged about 2.6% over the past 20 years. For context, the most substantial COLA recorded was 8.7% in 2023, whereas the lowest figures were registered in 2010 and 2011, both at 0.0%.
Executive Director of TSCL, Shannon Benton, highlighted that many seniors have expressed concerns regarding the adequacy of the COLA in relation to their real inflation experiences. In fact, approximately 80% of seniors surveyed believed that the inflation rate was significantly higher than the 2.5% COLA that was implemented at the beginning of this year.
The nonpartisan Committee for a Responsible Federal Budget (CRFB) has also added its voice to the conversation, forecasting an even higher COLA of 2.8% for 2026. Bill Sweeney, AARP’s senior vice president of government affairs, underscored the importance of this adjustment for seniors, noting that for many, Social Security represents the only source of income that is protected from inflation in retirement. The COLA is crucial for helping older Americans keep pace with rising everyday costs, which encompass necessities like groceries, housing, and prescription medications.
