Inflation's dropping, and rates should follow
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Inflation eased more than expected in June to 3% as falling gasoline prices offset another increase in rent, providing a third straight month of relief for Americans struggling with a pandemic-related spike in prices. Annual core inflation that strips out the volatile food and energy sectors dipped to 3.3%, the lowest since April 2021, from 3.4% the prior month.
The development, combined with a recently cooling job market, should bolster the case for the Federal Reserve to cut interest rates in the next couple of months - a move that likely would juice the economy and U.S. stocks.
Something else will drop, too, as inflation cools
The latest estimate of Social Security's cost-of-living adjustment (COLA) for 2025 slipped to 2.7% after the government said inflation cooled more than expected in June, new calculations showed Thursday.
In June, the 2025 COLA forecast was 3%.
The decline in the estimated 2025 COLA adjustment is likely to be bad news for seniors who continue to grapple with the cumulative effect of high inflation over the past few years and high prices for daily essentials, said Mary Johnson, a retired analyst for the nonprofit Senior Citizens League who tracks and calculates the COLA estimates.
Items like food, shelter, electricity, hospital and outpatient medical services that seniors spend the most money on continue to outpace the overall rate of inflation, Johnson said.
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One thing that'll cost 8.3% more: Costco membership
While Costco's $1.50 hotdog price is staying put for now, the same can't be said for its membership fees.
Starting Sept. 1, "Gold Star" membership in the U.S. and Canada will cost $65, up from $60. "Executive Memberships" will go from $120 to $130, with the membership's maximum annual 2% reward increasing from $1,000 to $1,250.
It's the first time Costco has announced a price hike since 2017.
Costco says the fee increase will impact about 52 million memberships, a little over half of which are executive memberships. The retailer operates 882 warehouses, 609 of which are in the U.S. and Puerto Rico.
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