Consumer Price Report Sets Social Sec Change

Gather ‘round the electric chair, kiddies. Uncle George will read ja the data just out from BLS.  Rent and gas are up, like you didn’t notice.

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.5 percent before seasonal adjustment.

Increases in the shelter and gasoline indexes were the main causes of the rise in the all items index. The gasoline index rose 5.8 percent in September and accounted for more than half of the all items increase. The shelter index increased 0.4 percent, its largest increase since May.

The energy index increased 2.9 percent, its largest advance since April. Along with the gasoline index, other energy component indexes also rose. The index for food, in contrast, was unchanged for the third consecutive month, as the food at home index continued to decline.

The index for all items less food and energy rose 0.1 percent in September after a 0.3-percent increase in August. Along with the shelter index, the indexes for

medical care, motor vehicle insurance, and personal care all increased in September, as did the indexes for education, alcoholic beverages, airline fares,and tobacco. The indexes for communication, apparel, used cars and trucks, recreation, and new vehicles all declined.

The all items index rose 1.5 percent for the 12 months ending September, its largest 12-month increase since October 2014. The index for all items less food and energy rose 2.2 percent for the 12 months ending September. The food index declined 0.3 percent over the span, and the energy index fell 2.9 percent.”

Whether you believe the BLS numbers, or not, is problematic. What really matters most to government (and those of us getting Social Security) right now is that Consumer Prices today are the last piece needed to set Social Security payments for 2017. From this SSA.GOV page, the process goes like this:

“How is a COLA calculated?

The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.

A COLA effective for December of the current year is equal to the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a COLA became effective. If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase, or if the rounded increase is zero, there is no COLA.”

Since I am armed and dangerous with spreadsheets, and the official SSA CPI-W data may be found here, it is easy to play Plug-n-Play with the numbers.

The calculation (at least to us – this needs official blessings which will come along shortly) goes like this:

As you will see, there are at least two ways to figure the SSA CPI adjustment.

If you go back to the BLS Press release spreadsheet found here, you will see the BLS 2015 CPI-W tables. But, when you look at the SSA data page here, you don’t find the same numbers!

Let me show you: The BLS data fotr CPI-W in July 2015 was 233.141 But the number used by SSA on their data page is 233.806. See why I like vodka?

Is the government being crooked? Likely not. But even that has a bunch of asterisks and maybe a grant of immunity involved.

Seems probable is that some arcane calculation for chained dollars, or some other statistical magic, is being applied. Still, seems worth mentioning that what we see (as in BLS data) may not be what we get in SSA CPI adjustments.

Using a consistent data set (the BLS CPI-W table) which we did this morning does give us a reasonable expectation of what to expect.


I will try to remember to update this when the SSA number is posted but this is a range to be thinking about.  The source page is 

For someone like me getting near maximum ($2,350’ish per month top line SSA) a 6-10ths percent increase works out to about $14 dollars per month. (Try not to spend it all in one place!)

One of our readers is a well-respected department chair in finance and teaches the art of forensic economics. Seems to me running down a lay explanation of the difference between one source and the other would be a fine grad student class project.

I’d go on with it, but other priorities intrude.

I hate it when CPI-W from one source doesn’t tie-back to CPI cited by another source. It takes a good slice of the joy out of figuring out how the world works, or in this case, doesn’t.

In the meantime, that tiny increase in top line will be gobbled up by Medicare hikes. Example: Medicare drug premiums to jump 9 percent in 2017. Think of that as an average. Top earners (I hang my head in shame) have this to look forward to: “Why Your 2017 Medicare Premiums Could Jump 20%.”

I’d ask rhetorically “Are we having fun, yet?” But I already NO! the answer, so to speak.

FACT: If you really thought the government retirement system would fully maintain your purchasing power in later life, you are delusional. As a planning aid, figure you will need to make inflation plus 6-9% per year more each and every year of retirement. Because the tiny CPI-W based increase you get will be gobbled up *(and then some) by runaway healthcare costs.

The government giveth and the government (and the health insurance lobby) taketh away.

Another whine? Here, have a glass of my Medicare Part D went from $25 in 2015 to $38 in 2016. I’m afraid to look at 2017.

Through the miracle of government accounting, these healthcare costs are not fully reflected in statistical data. Perhaps because Part D is optional? I can’t say. I do know retirement income adjustments don’t keep track with expenses – there’s a huge gulf on the way to the grave. A kind of slow bleed-out to siphon Ure money back to the crooks.

But there’s a lot of think about, especially with open enrollment here.

Little Marco Gets It Right

Rubio: Iran nuclear deal an unfolding disaster.

And from our “Yeah, Right…” File

FBI and State Dept. deny deal over Clinton email.

We have long suspected that FBI Agents Say Comey ‘Stood In The Way’ Of Clinton Email Investigation.

Oh, and Top Hillary Clinton Aides Agreed to Accept Cash From Lobbyists Working for Foreign Governments.

10 thoughts on “Consumer Price Report Sets Social Sec Change”

  1. Raises for ALL government employees should be limited to whatever amount Social Security recipients are allotted. Want to bet there would be a scramble to make some changes?

  2. New Jersey’s 23 cents per gallon of gasoline goes into effect on November 1.This will cause prices on everything moved by truck in the Northeast Corridor to jump,as truckers will no longer have an oasis in which to fill their tanks.

    • funny thing, here in NJ when we have product delivered, most companies still have fuel surcharge listed and a fee in column….with gas the lowest in years, ha! maybe they’ll come up with a new appellation for it when this increase hits. on the bright side sales tax going from7% to 6.85%, good for my business.

  3. When voting in November, one should remember that,
    “Sheep can be sheared many times, but can be skinned only once!”

  4. If mr. Trump becomes president one of the most important things to do would be to change the charter of the corporation’s so that the corporation is first for the people and II it’s for the shareholders and the shareholders would get nothing until the people the community the state the United States is first satisfied, that way a corporation cannot leave but has to stay there 2 Supply that community comma that way they can’t leave to another country

    • Yes corporations would not want to come here but the ones that are here or the new ones that are made would make us great again instead of running off to another country

      • 3rd to change would be the patenting process so that greaT ideas would not be hidden by corporations,the period of ownership would be greatly reduced

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