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By Jasmine Laws
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The Senior Citizens League (TSCL) has predicted that Social Security's 2026 Cost-of-Living Adjustment (COLA) will be 2.5 percent, up from April's prediction of 2.4 percent.
While May's prediction is slightly up from March's 2.3 percent forecast, it has not surpassed the 2.5 percent adjustment awarded for 2025, although TSCL's predictions have now increased for four consecutive months.
Why It Matters
This early prediction arrives as inflation continues to settle after pandemic-era spikes. After increases of 5.9 percent in 2022 and 8.7 percent in 2023, the predictions for 2026 mark a clear drop in inflation.
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COLA affects more than 70 million Americans who receive Social Security benefits, and while the modest forecast suggests promising signs of dropping inflation, there still could be tighter financial conditions ahead for retirees, whose budgets are sensitive to even small changes in benefit growth.
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What To Know
TSCL, one of the country's largest nonpartisan seniors groups, unveiled its May forecast on June 11.
The COLA is calculated by averaging third-quarter inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure of the average change in prices paid for a basket of goods and services purchased by urban workers.
However, the TSCL also said in its report that the Bureau of Labor Statistics faces "unprecedented challenges collecting data for the price index used to calculate the COLA."
The U.S. Bureau of Labor Statistics shared a notice on June 4, saying that it was "reducing sample in areas across the country." A number of cities had already been suspended from Consumer Price Index collection entirely in April.
These cities included Lincoln, Nebraska, and Provo, Utah. In June, the bureau suspended collection entirely from Buffalo, New York.
According to the Wall Street Journal, the bureau reportedly told outside economists that the federal hiring freeze had meant the agency was forced to cut back on the number of businesses where it checks prices, and that in April less accurate methods for predicting price changes were used.
"Sample reduction and collection suspension affect both the commodity and services survey and the housing survey," the Bureau of Labor Statistics told Newsweek. "These actions have minimal impact on the overall all-items CPI-U and CPI-W indexes, but they may increase the volatility of subnational or item-specific indexes."
As the Consumer Price Index (CPI), calculated by the Bureau of Labor Statistics, is used as part of the calculation for COLA, it could have knock-on effects for predictions.
TSCL said in its report: "Problems with CPI data could spell problems for American seniors. Putting less reliable data into the CPI makes it a less reliable measure of inflation, and seniors already have their doubts."
What People Are Saying
The Senior Citizens League, in its report: "If the government fails to act and the CPI's data quality begins to erode, it increases the likelihood of the government providing a COLA that doesn't match inflation. While there's a chance that any miss could be higher than actual inflation, it's just as likely that a miss would be low. A COLA that comes in under inflation would set seniors back for the rest of their retirement, as Social Security checks compound over time with each additional COLA."
The U.S. Bureau of Labor Statistics, in its June 4 notice: "Sample reduction and collection suspension affect both the commodity and services survey and the housing survey. These actions have minimal impact on the overall all-items CPI-U index, but they may increase the volatility of subnational or item-specific indexes. The number of imputed items and the response rates increased in April due to these actions. BLS makes reductions when current resources can no longer support the collection effort. BLS will continue to evaluate survey operations."
What Happens Next
The official COLA for 2026 will be announced by the Social Security Administration in October, based on inflation data through the third quarter. Analysts and advocacy groups will continue updating forecasts monthly.
Update 6/12/25, 12:10 p.m. ET: This article has been updated with comment from the Bureau of Labor Statistics.
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