New consumer price data shows inflation has dropped to its lowest level since March 2021. That decline – while not yet felt in the wallets of most Americans – will likely push next year’s Social Security cost of living adjustment to below 3%.

The nonpartisan Social Citizens League’s latest projections shows the 2024 Social Security COLA will be 2.7%. That’s a substantial decrease from the 8.7% increase seen last year amid record inflation figures and slightly below last month’s projection of 3.1%.

The actual COLA will be determined using third-quarter data – July, August and September – from the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.

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Last year’s COLA not helping seniors

According to a survey by the SCL, older consumers are reporting little improvement in their household spending even with cooling inflation. Sixty-two percent of survey participants report food costs as their fastest-growing cost. Housing costs are the biggest concern of 22% of survey respondents. The survey has 2,275 respondents through June 6, 2023.

Since January of this year, the actual inflation rate, as measured by CPI-W, was lower than the amount old Americans received in their 8.7% COLA. That increase boosted the average retiree benefit some $52 a month to $1,694. Inflation, however, was so severe in 2021 and 2022 that the average Social Security recipient fell behind by $1,054.

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