The Bureau of Labor Statistics (BLS) recently announced a two percent increase in the 2018 Cost of Living Adjustment (COLA) for military and federal civilian retirees, survivor benefit annuitants, disabled veterans and Social Security recipients. The new COLA rate is effective December 1, 2017 and the adjustment will appear in the December 30, 2017 payment.

By law, COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It is a broad measure of consumer prices generated by the BLS from the third quarter of the previous year to the third quarter of the current year. The CPI-W measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education. Since 2008, the annual COLA has been above two percent only once and has been zero three times.