Due to inflation, Social Security recipients will get a cost-of-living adjustment
SACHA PFEIFFER, HOST:
Food, shelter, electricity - everyday needs that keep getting more expensive. The annual inflation rate in September was 8.2% - that's according to a government report out today, and that's almost as high as the previous month. Inflation is chipping away at most people's buying power, but those who receive Social Security benefits will soon get some relief.
NPR's Scott Horsley has the details. Hi, Scott.
SCOTT HORSLEY, BYLINE: Good to be with you.
PFEIFFER: Start us off with that Social Security announcement today. What's the good news there?
HORSLEY: Every January, people who get Social Security receive an automatic cost-of-living increase, and ordinarily, when prices are stable, it's not a big deal. But of course, this year, inflation has been really high, so come January, retirees and others who get Social Security will receive the largest cost-of-living increase in decades. Benefits are going up 8.7% next year. For the average retiree, that means an extra $141 a month. That was welcome news to Jeanie Reid. She's a retired nurse who lives near Tucson, Ariz.
JEANIE REID: I was real pleased (laughter). That won't offset the extreme increases, but it sure will help.
HORSLEY: That benefit increase offers an important safeguard for more than 65 million people who get Social Security. Of course, most people don't have that kind of guarantee - that their income will keep up with rising prices. For the average worker, for example, wages rose just 5% over the last 12 months, while prices, as you said, jumped more than 8%.
PFEIFFER: And what is driving those price hikes?
HORSLEY: Well, they're really widespread, especially on the services side. Both rent and health care costs were up significantly last month. Of course, grocery prices are still climbing, and while gasoline prices came down a little bit in September, other energy costs are on the rise. Electricity prices are up more than 15% in the last year. That's a challenge for Reid, who is still running her air conditioner in Arizona, even in mid-October.
REID: It was 90 yesterday. We're in, quote, "a cool snap." Earlier in the summer, there were days when it was 108. So you'd turn on your air conditioner sometime in May, and you don't turn it off - I'll probably turn it off in the next couple of weeks.
HORSLEY: People who live in colder parts of the country are likely to see a big jump in heating bills this winter. The Energy Department, this week, projected that heating costs will be up 10% to 28% from last winter, mostly because of rising prices for natural gas and heating oil but also because forecasters think it's going be a little bit colder.
PFEIFFER: And we just see inflation keep going up, not leveling off.
HORSLEY: No, prices actually rose more between August and September than the two previous months. One job that really stands out in September is the price of school lunches, which soared 44.9% in just that one month. Rising food costs explain some of that, but mainly it's because the federal government's no longer subsidizing free school lunches for all students, regardless of income, the way it did for the last two years. And that's kind of a striking counterpoint to what's happening with Social Security.
PFEIFFER: What do today's numbers tell us about the Fed's effort to try to curb inflation by raising interest rates?
HORSLEY: Well, it's going to be a long slog, and the Fed is going to probably keep boosting rates at a hefty pace at its next meeting in November. The stock market didn't like that at first but then rebounded, and the Dow ended up more than 800 points today.
PFEIFFER: That's NPR's Scott Horsley. Thank you.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.