Sorry for the absence. I have been ill.
We are now almost half way through fiscal year 2012. Whether or not there is a COLA for January 2013 will depend on where the CPI-W is from July through September 2012. That’s not far off now.
The baseline level (my term for it,) which was the amount which determined the amount of the 2012 COLA, is 223.233. This was the average CPI-W for July through September 2011. The average CPI-W will need to exceed this amount in order to generate a COLA in 2013.
To remind everyone, the CPI-W (which stands for Consumer Price Index for Urban Wage Earners and Clerical Workers) represents the cost of “a basket of goods and services” during the month in question. The starting point for CPI-W for most items was 1982 through 1984, when the CPI-W was initialized at 100. So, in just under 30 years the cost of living has increased 223.2%
The continuously increasing cost of gasoline is beginning to filter into the cost of living as a whole. On October 1st, the nationwide average cost of regular unleaded gasoline was $3.42. The average decreased to about $3.20 in late December, and has been rising ever since. By the end of Febuary, the average had reached about $3.74. Today, it’s about $3.92 per gallon, March is over in two days, so we should see another jump in CPI-W when the March numbers are published in mid-April.
The February 2012 CPI-W
According to the Department of Labor, Bureau of Labor Statistics (BLS) the CPI-W increased by 0.5% in both January and February, 2012. The CPI-W amounts for the current fiscal year are:
September, 2011 223.688
October, 2011 223.043 (-0.3%)
November, 2011 222.813 (-0.1%)
December, 2011 222.166 (-0.1%)
January, 2012 223.216 (+0.5%)
February, 2012 224.317 (+0.5%)
Here it is in graph form.
For a 1% COLA, the July 2012 through September 2012 CPI-W average would have to be 225.465.
This amount, along with the baseline amount, are shown on the graph.
For comparison, here is the graph for the same period from jast year.
They’re different, but we are approaching the 1% COLA line in each February. We were a bit closer last year, but the deliberate manipulation of the cost of gasoline will continue. A lot of gasoline is being kept out of the market by the oil companies and by speculators, both for their own profit, and by rich conservatives like the Koch Brothers, who hope to weaken the Democrat’s chances in November.
For more information on the CPI-W, please refer to Consumer Price Index Summary.