The income of US retirees is likely to rise more than usual next year, continuing to put upward pressure on inflation, which has proved to be longer-lasting than economists had expected.
According to the The Senior Citizens League report, the CPI-linked cost of living adjustment for social security is expected to reach 6.1% next year, the biggest increase since 1983. That means more money will flow into the pockets of 65 million Americans, most of them the elderly.
Meanwhile, BlackRock, AmazonWaiting for big wage increases by employers and the biggest rent increases in years will continue to fuel inflationary pressures in 2022.
Aneta Markowska, chief economist at Jefferies, said, "one data point does not represent a trend, but when there are three data points in a row, the situation does become serious." We have not experienced such intensity, breadth and length of inflation since the 1980s.
While the Fed and the Biden administration stress that price increases are temporary and limited to some areas such as car rentals, continued increases in incomes and contract wages are likely to perpetuate inflation.