On Thursday, October 13, the American Social Security Administration announced that retirees and beneficiaries will receive a cost-of-living adjustment (COLA) of 8.7% next year, the largest increase since 1981.
This means that beneficiaries will earn an average of $146 more, totaling an average monthly income of $1,827 in 2023.
The adjustment aims to help the approximately 70 million beneficiaries of American Social Security cope with the high inflation that has plagued the United States since last year.
Record Inflation
Also on Thursday, the Bureau of Labor Statistics announced that the Consumer Price Index – the index that measures inflation – had an annual increase of 8.2% in September compared to a year ago. Price growth continues to be rapid and the highest in the last 40 years.
On a monthly basis, overall consumer prices increased by 0.4% compared to August. Economists had projected that the monthly number would only increase by 0.2%.
The new index surprised investors and triggered a turnaround in the financial market as fears grow that persistent inflation will lead to even more aggressive action from the American Central Bank (FED).
The Fed has already raised the benchmark interest rate five times this year as part of a plan to cool the economy by suppressing demand from consumers and businesses. It is believed that with the persistence of inflation, higher interest rates are also on the way.