Benefit Checks Will Increase 4.2%

The nation’s 38 million Social Security recipients will get a 4.2% cost-of-living increase in their benefit checks beginning Jan. 1, the largest such increase in 5 1/2 years.

The government calibrates the annual increases on the change in a measure of the consumer price index during the July-September quarter over figures from the same quarter of the previous year. Since consumer price inflation in all of last year was just 1.1% and is running at a rate of 4.8% so far this year, a much larger benefit increase for 1988 had been expected. Last year’s benefit increase was 1.3%.

The Social Security increases are calculated from a more narrowly based version of the consumer price index than is usually used to measure price inflation, one that covers only urban wage earners and clerical workers, instead of all urban consumers.

In September that index rose 1.7 points to 344.40, meaning that goods urban wage-earners could have bought for $100 in 1967 would now cost $344.40.