In good news for drivers, gasoline prices dropped 4.9%, but the decrease was offset by rising costs for shelter, food, and medical care. At this point, we’re all pretty used to everything being so much more expensive than last year, but as prices keep climbing, we should expect even more aggressive rate hikes by the Federal Reserve in our future. And that could bring another set of financial pains for us, from higher interest rates on mortgages, to higher rates on your credit cards, making any debt you might have even harder to pay off. Let’s not forget, rate hikes also raise the possibility of a recession. It’s why markets aren’t taking the news too well today; stocks are mixed as investors consider the possibility of higher rates that will take a bite out of corporate profits. But in good news for Americans receiving Social Security benefits, today’s high inflation rate also brought an 8.7% cost-of-living adjustment (COLA) increase, the highest since 1981. Social Security benefits are indexed to inflation, so when inflation goes up, so do monthly checks. The rise is permanent, so even if the U.S. enters a recession and inflation drops next year, Americans on a fixed income will continue to receive the boosted benefit.
