Social Security benefits are increasing for the first time since 2009, rising 3.6 percent after cost-of-living adjustments. The increase was largely fueled by a spike in energy and food prices. But economists say they don’t expect that inflation will be a major problem in 2012.
But Dutta said that he doesn’t believe that inflation will continue to rise unchecked in the near future, as energy and commodity prices have already receded. The troubles in the global economy are also likely to keep rising prices in check, he said, given the ongoing crisis in Europe, the slowdown in China and the sluggish recovery in the United States.
Social Security benefits aren’t expected to budge much, either, said Paul Van de Water, a senior fellow at the left-leaning Center for Budget and Policy Priorities. “Inflation probably will stay low for the next several years, and the expectation is for a relatively small [cost-of-living adjustment] next year,” he said.