The low level of U.S. inflation is helpful for most Americans, but seniors might not find the news as welcome. They won’t get an increase in their Social Security checks in 2016.
The consumer price index, or cost of living, declined by a seasonally adjusted 0.2% in September, the government said Thursday. And over the past 12 months inflation at the consumer level has shown zero increase.
As a result, the government is expected to report on Thursday that Americans who collect Social Security won’t get a cost-of-living increase in their monthly checks in 2016.
Annual increases in Social Security are made every year based on changes in a component of the consumer price index known as CPI-W. The index fell 0.4% in the period used by the government to calculate the annual increase in cost-of-living adjustments, the Labor Department said.
Social Security recipients got a 1.7% cost-of-living adjustment in 2015, 1.5% in 2014 and 1.7% in 2013. There was no increase was in 2010 and 2011.
Inflation has fallen sharply over the past year mainly because of a plunge in gasoline costs. While all Americans benefit, seniors tend to drive less and not save as much because of cheaper gas.
The cost of gasoline fell 9% in September, the government reported. The price at the pump slumped in August and September as the summer driving season came to a close.
The cost of food, however, rose 0.4% owing largely to higher prices for dairy, fruits and vegetables.
Another measure of consumer inflation that omits up-and-down food and energy prices rose 0.2%. So-called core prices have climbed 1.9% over the past 12 months, driven by climbing rents.