US retirees may see bigger-than-usual income bumps next year, maintaining upward pressure on inflation that’s already proving more persistent than economists were expecting. Next year’s Social Security cost-of-living adjustment -- which is tied to the consumer price index -- is forecast to come in at 6.1%, the biggest increase since 1983, according to The Senior Citizens League. The U.S. consumer price index jumped 5.4% in June, the most since 2008, amid a rise in hotels, used cars and airfares. While the Federal Reserve and President Joe Biden’s administration downplay price increases as transitory and limited to certain sectors such as rental cars, sustained gains for income and contract wages could keep price gains going. The adjustment is finalized in October, and is based on cost increases for 2021 so it could still fluctuate.

Source: Mint July 20, 2021 14:03 UTC