US Consumer Price Index Prediction: How much is inflation expected to rise and what will it mean for COLA?
The latest inflation figures have strengthened expectations for a larger Social Security cost of living adjustment in 2027.
US inflation remains one of the most important numbers for millions of Americans, particularly Social Security recipients waiting to learn how much their benefits could increase next year.
The Bureau of Labor Statistics released the August Consumer Price Index on September 11. Headline inflation rose 0.4% during the month and was 3.4% higher than a year earlier.
Trading Economics had expected the CPI index to rise to around 334.9 points, compared with 333.92 previously, while its broader third-quarter forecast points to annual inflation of about 3.7%.
The next major reading will be September inflation, which will complete the three-month period used to calculate the 2027 Social Security COLA.
What is predicted for US inflation?
Trading Economics expects inflation to remain elevated through the third quarter before easing later.
Its current projections put annual inflation at around 3.7% for the third quarter of 2026 before falling toward 3.4% by the end of the year.
Monthly inflation is also projected to remain positive, meaning prices are still expected to rise even if the annual rate eventually begins to cool.
The September CPI report will be particularly important because it will provide the final data needed for Social Security's annual adjustment.
What could inflation mean for the 2027 COLA?
Social Security doesn't calculate COLA using the headline CPI figure most commonly reported in the news.
Instead, the calculation uses the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI W, and compares the average reading from July, August, and September with the same three-month average from the previous year.
After the August inflation report, estimates for the 2027 COLA are generally sitting between about 3.4% and 3.6%.
That would be higher than the 2.8% adjustment beneficiaries received for 2026.
The final figure remains unknown because September's CPI-W reading hasn't yet been released.
The Bureau of Labor Statistics is scheduled to publish September inflation data on October 14, after which the Social Security Administration can announce the official 2027 COLA.
Until then, persistent inflation suggests beneficiaries are likely to receive a noticeably larger adjustment next year, although the exact percentage will depend on the final September figures.
