The Department of Labor Bureau of Labor Statistics has just released the September CPI-W amount. It is 223.688, an increase of 0.2%, which is a little less than I was expecting.
SSA determines its COLAs by taking the average of the July, August, and September CPI-W amounts and comparing this average to the average for the last July through September period which generated a COLA; in this case, July through September 2008 which generated the COLA payable as of January 2009.
The average for July through September 2008 was 215.495. As readers of this blog know, I have been referring to this as the “baseline” average.
The average for this year is:
669.700 / 3 = 223.233 (The average CPI-W for the quarter.)
Divided by the baseline average…
223.233 / 215.495 = 3.6%
The amount of the COLA will be 3.6%. Social Security should issue a press release announcing this later today. I shall post it at the first opportunity.
Starting in November, with the release of the October CPI-W data, I will begin a new series of articles entltled “2013 COLA Watch. The baseline will be 223.233. I expect that October will show a CPI-W substantial increase, because very little of yesterday’s PPI increase was reflected in the in this month’s CPI-W. The retailers have cost increases they need to pass on to us.