Authored by Jack Phillips via The Epoch Times (emphasis ours),
A senior citizens group has forecast that the cost-of-living adjustment (COLA) for Social Security payments will increase by 3.9 percent next year, more than 1 percentage point higher than last month’s prediction.
The Senior Citizens League, which issues monthly projections on the COLA for Social Security, said in a statement Tuesday the 3.9 percent for 2027 is already higher than the 2.8 percent increase that went into effect in 2026. The group in April had forecast a 2.8 percent increase for next year’s payments.
“Fast-rising oil prices could have downstream effects on the economy and push inflation even higher,” potentially leading to a higher COLA projection, the group said, adding that research has show that higher gas prices can lead to higher prices across the board.
The COLA for next year is usually announced by the Social Security Administration in October and is based on Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) reports issued by the Labor Department for the months of July, August, and September.
The group’s forecast Tuesday came as the department released its monthly CPI report, which found that inflation in April increased by 0.6 percent month over month, along with a 3.8 percent annual increase.
According to the Labor Department’s report, the rise in inflation was in part caused by higher gasoline, energy, and fuel prices. The gasoline index rose 5.4 percent over the past month while gas prices increased 11.1 percent in April, and the fuel index increased by 5.8 percent, it found.
Data released by the American Automobile Association (AAA) showed that as of Thursday, the average price of a gallon of regular gasoline rose by 2 cents to $4.53 nationwide. Diesel rose by 1 cent to $5.66 per gallon, according to the data.
Just two days before the U.S.–Iran war started in late February, regular gasoline cost around $2.98 per gallon on average nationwide, according to AAA.
After the United States and Israel launched strikes on Iran on Feb. 28, Tehran effectively closed off access to the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas passes. The choking off of the strait has sent energy prices higher and has rattled world markets.
The oil shock shows no sign of letting up as the International Energy Agency warned Wednesday that the “mounting supply losses from the Strait of Hormuz are depleting global oil inventories at a record pace.’’
Meanwhile, the producer price index, another measure of inflation that tracks prices before they reach consumers, rose 6 percent from a year earlier, the highest point in more than three years, the Labor Department reported Wednesday.
“Many seniors are telling us the same thing: As inflation picks back up, life still does not feel affordable. The average senior already lives on much less than younger Americans, according to the Census Bureau, and our supporters constantly tell us they feel like they’re falling farther and farther behind,” Shannon Benton, the president of the Senior Citizens League, said in a statement on Tuesday.
She added that retirees living on fixed incomes are seeing prices on health care, housing, utilities, and insurance “continue to rise faster than prices in the rest of the economy, silently wrenching seniors dry.”
The Associated Press contributed to this report.