Alert – New inflation data surprises Wall Street – here’s what it means for Social Security uplifts for next year – News Alerts

Consumer prices were up 2.4 percent from a year earlier in September, according to new data released Thursday by the Bureau of Labor Statistics.

This was higher than expectations, which were for a 2.3 percent annual rate of inflation.

The Social Security Administration has announced the cost-of-living adjustment for 2025 off the back of the inflation numbers.

The cost-of-living adjustment, or COLA, is the yearly increase to monthly Social Security benefits that millions of seniors rely on.

Wall Street is also paying close attention to the data for clues as to what moves the Federal Reserve will make at its next meeting in November.

In September, the central bank cut interest rates by a bumper 50 percentage points for the first time in 16 years.

12:54

Social Security uplift announced

The Social Security Administration has announced a 2.5 percent cost-of-living adjustment for 2025 for more than 72.5 million Americans.

The cost-of-living adjustment, or COLA, is the yearly increase to monthly Social Security benefits that millions of seniors rely on.

The uplift will increase the average retired workers’ benefit by $48, to $1,968 a month.

The Social Security Administration confirmed the change on a post on social media site X, following the announcement of the inflation data for September.

Serious worried senior couple calculating bills to pay or checking domestic finances stressed of debt, retired elderly old family reading documents concerned about loan bankruptcy money problems; Shutterstock ID 1185179293; purchase_order: -; job: -; client: -; other: -

14:03

How did markets react to the inflation data?

Wall Street’s main indexes fell at the open on Thursday, after consumer price index data showed inflation was higher than expected in September.

The Dow Jones Industrial Average fell 84 points, or 0.14 percent, at the open, while the S&P 500 fell 13.7 points, or 0.24 percent.

The Nasdaq Composite also dropped 91.0 points, or 0.5 percent, at the opening bell.

FILE - Signs marking the intersection of Broad and Walls Streets appear near the New York Stock Exchange on Oct. 1, 2024, in New York. (AP Photo/Peter Morgan, File)

13:51

COLA uplift 'disappointing', says senior association

Nonpartisan group The Senior Citizens League (TCSL) has branded the COLA uplift ‘disappointing,’ following the announcement of a 2.5 percent rise in benefits.

The group said that the measure by which the yearly increase is calculated fails to measure inflation as seniors experience it.

TCSL Executive Director Shannon Benton said this year represents ‘another lost opportunity to grant seniors the financial relief they deserve’ by changing the COLA calculation which would ‘better reflect seniors’ changing expenses.’

She suggested instituting a minimum COLA of 3 percent.

‘Our research shows that 67 percent of seniors depend on Social Security for more than half their income and that 62 percent worry their retirement income won’t even cover essentials like groceries and medical bills,’ Benton added.

13:23

Millions to receive benefit hike, says Social Security Administration

Nearly 68 million Social Security beneficiaries will see a 2.5 percent cost-of-living adjustment beginning in January 2025, the Social Security Administration said in a statement.

Increased payments to nearly 7.5 million people receiving Supplemental Security Income (SSI) funds will also start on December 31, 2024, it added.

‘Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool,’ said Martin O’Malley, Commissioner of Social Security.

Some other adjustments that take effect in January of each year are based on the increase in average wages. 

Based on that increase, the maximum amount of earnings subject to the Social Security tax is slated to increase from $168,600 to $176,100.

13:07