While inflation surges, the cost-of-living adjustment (COLA) has increased benefits for Social Security recipients, according to separate reports from the Associated Press. Millions of Social Security recipients will get an 8.7% boost in their benefits in 2023, representing the largest adjustment in more than 40 years. The COLA means the average recipient will receive more than $140 extra per month beginning in January.
However, the increased payments may quickly be consumed by the accelerated inflation recorded in September. Consumer prices rose 8.2% in September compared with a year earlier and on a month-to-month basis, prices increased 0.4% from August to September. The cost of housing and other necessities is likely to intensify pressure on households, wiping out gains and ensuring that the Federal Reserve will keep raising interest rates aggressively.
Core inflation climbed 0.6% from August to September and 6.6% over the past 12 months. The yearly core figure is the biggest increase in 40 years. Higher prices for many services — health care, auto repair, and housing, among others — drove inflation last month.
