← Benefits News

Developing

One of the three months that sets your 2027 raise is now on the board

Nobody in Washington decides the cost-of-living adjustment. Three months of price data decide it, and the first of those three was published on August 12th. How will your 2027 COLA raise stack up?

By Kwame Kuadey

Adjunct Professor of Finance, Johns Hopkins Carey Business School · Published August 16, 2026 · 4 min read

Every October, tens of millions of households wait on one number. It arrives with a press release, gets read out on the news, and is then argued about for a week. What almost nobody mentions is that by the time it’s announced, the number has already been true for two weeks. It isn’t a decision. It’s a calculation, and the calculation runs on autopilot.

Here’s the rule, in the Social Security Administration’s own words: the COLA is “based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year.”

Third quarter means July, August, and September. That’s it. Three months of one price index, averaged, compared to the same three months a year earlier. On August 12, the Bureau of Labor Statistics published July.

Where the math stands right now

The July 2026 CPI-W came in at an index level of 327.104, up 3.4 percent over the last 12 months. The baseline it’s measured against — the average of July, August, and September 2025 — is 317.265.

That is not a forecast. It’s the answer to a narrow question — what happens if prices stop moving? — and prices never stop moving. But it’s a useful anchor, because it tells you which side of last year you’re starting from. The 2026 COLA was 2.8 percent. As of the first of three months, 2027 is tracking above it.

How much would have to change to move it

Less than you’d think. The COLA is rounded to the nearest tenth of a percent, and at this index level a tenth of a percent is worth roughly three-tenths of an index point in the quarterly average. Working backward from the July figure:

• If August and September prices come in about 0.08 percent below July, the result rounds down to 3.0 percent.
• If they come in about 0.07 percent above July, it rounds up to 3.2 percent.

Two months of ordinary price movement covers that range easily. Energy alone can do it: the CPI energy index fell 1.5 percent in July and is still up 14.7 percent over the year. So treat 3.1 percent as the center of a range, not a promise — and be skeptical of anyone publishing a confident 2027 COLA number today, including the ones that look official.

The three dates left on the calendar

1. Friday, September 11

   BLS publishes the August CPI

   Bureau of Labor Statistics · Two of three months known.

2. Mid-October

   BLS publishes the September CPI

   Bureau of Labor Statistics · At that moment the COLA is arithmetically settled, and the Social Security Administration announces it the same day.

3. November

   CMS announces the 2027 Medicare numbers

   Centers for Medicare & Medicaid Services · This is the one that decides how much of the raise you actually keep.

If you want to follow this yourself, you don’t need us. Open the BLS news release, scroll to the section headed “Not seasonally adjusted CPI measures,” and find the line for Urban Wage Earners and Clerical Workers. That index level is the only number in the release that affects your check.

What to do with this today

Nothing urgent — and that’s the point. There is no form to file, no deadline, and nobody to call. The COLA is automatic; it will appear in your January payment whether you do anything or not. What this date is genuinely good for is planning:

• Don’t lock in a 2027 budget yet. The raise isn’t final until October, and the Medicare premium that offsets part of it isn’t final until November.
• Watch for scams timed to the announcement. Every October brings calls and texts claiming you must “confirm” or “activate” your increase. There is nothing to confirm.
• Check your COLA notice in the Message Center of your my Social Security account in late November, rather than waiting on the mail.

Claim → source