A small bump in Social Security checks

Kai Ryssdal (0:00)

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Kimberly Adams (0:37)

Seniors are about to get slightly bigger Social Security payments.

From Marketplace in Washington, I'm Kimberly Adams. The Social Security Administration is set to announce next year's Cost of Living Adjustment, or COLA, tomorrow morning. Seniors will get a little more in their Social Security checks each month in effort to help them cope with inflation. Marketplace's Nancy Marshall-Ganzer joins me now with the details. Good morning, Nancy.

Nancy Marshall-Ganzer (1:03)

Good morning.

Kimberly Adams (1:04)

So do we have an idea of how much of a Social Security bump seniors can expect?

Nancy Marshall-Ganzer (1:09)

We do. AARP is predicting an increase of 3.6% in 2027, and that would take effect this January. Now, the Consumer Price Index increased 3.4% in August, so Social Security would just barely be keeping up with inflation. Of course, we're scheduled to get the CPI for September tomorrow morning. The Social Security COLA for 2027 is expected to be released right around the same time.

Kimberly Adams (1:37)

If there is a 3.6% increase, how much more would seniors actually get per month?

Nancy Marshall-Ganzer (1:43)

Well, AARP says it would work out to $75 more a month for the average retiree, who currently gets just slightly more than $2,000 a month from Social Security. Now, keep in mind, Kimberly, the Senior Citizens League, a nonprofit that advocates for seniors, they say the cost of living for the average senior is about $2,700 a month.

Kimberly Adams (2:06)

That math doesn't quite add up. So how are seniors keeping up with rising prices?

Nancy Marshall-Ganzer (2:11)

They're really not, Kimberly. In a survey by the Nationwide Retirement Institute, 74% of current Social Security beneficiaries said, they've made financial changes because their Social Security checks were not keeping up with rising prices. More than half said they've cut discretionary spending, things like travel and eating out. 38% said they've reduced spending on essentials, including groceries and medications. And a quarter of the seniors in the survey said they're relying more on their savings to make ends meet.

Kimberly Adams (2:41)

Thank you, Nancy.

Nancy Marshall-Ganzer (2:42)

You're welcome.

Kimberly Adams (2:43)

It's earnings season for banks and the first reports are out. JPMorgan Chase fell short of Wall Street expectations. Earnings per share came out to $5.57, which is more than 30 cents less than expected. JPMorgan still brought in more than $15 billion of net income. Meanwhile, Wells Fargo blew past expectations, as did Goldman Sachs. In early trading, Goldman is up almost 2%.

Wells Fargo is down 1.5%, and JPMorgan Chase is up 0.7%.

All this week, the host of Marketplace's evening show, Kaya Rizdal, and ADP's chief economist, Nila Richardson, are sharing their reporting from Mumbai, India, for Marketplace's series, Age of Work. They were looking at how the country can take advantage of its upcoming demographic golden age. India is coming up on a period in which its prime-age workforce will rank near the top of the world. Currently, the medium age in Mumbai and India as a whole is around 29, 10 years younger than the United States. India is the world's fastest growing major economy, and yet small business owners are still facing global headwinds. Business owners, you say, always pray to the gods before they start for the day.

SPEAKER_4 (4:15)

Yes.

Kai Ryssdal (4:17)

How's your prayer going?

Kimberly Adams (4:18)

How is business?

SPEAKER_4 (4:19)

Business is not bad.

Since our prime minister has given us a call that for a year, all the Indians are not supposed to buy gold. That's what he's requested. And people are really following it out. So we have taken a hit of around 50 to 60 percent of business.

Kai Ryssdal (4:39)

That's a lot.

SPEAKER_4 (4:40)

Yes. But still we are not complaining because country first, you know.

Kai Ryssdal (4:45)

Say more about that, country first.

SPEAKER_4 (4:47)

Because the currency is getting devalued, and because of that effect, all the things are getting expensive.

Kimberly Adams (4:55)

The International Monetary Fund released its outlook for the global economy today.

It's predicting a somewhat sluggish 3.1% growth. Much of that growth is concentrated in just a few dozen countries, and the IMF expressed particular concern about mounting global debt, which is of particular risk in this moment of high borrowing costs in the bond market. For more on what's happening with the global bond market, I'm joined by Jeffrey Cleveland, Chief Economist at Payden and Regal. Jeffrey, I want to check in with you specifically about the European bond market. France is in particular having trouble. What's happening there?