The more-than 41 million retirees receiving Social Security checks in 2017 can expect tosee an increase in monthly benefit checks in 2018, but the bump isexpected to be lower than the Social Security Administrationprojected earlier this year.

The SSA’s 2017 trustees’ report, released last July, projectedthe 2018 COLA to be 1.7 percent on the low end and 2.8 percent onthe high end. The median projection was 2.2 percent.

But the unexpectedly slow rate of inflation will likely make a2.2 percent increase unlikely, say policy experts.

Cost-of-living adjustments are based on theConsumer Price Index for Urban Wage Earners and Clerical Workers,or the CPI-W inflation index.

Trustees compare current-year third quarter (July, August, andSeptember) CPI-W readings with the last COLA adjustment todetermine increases in benefits.

The CPI-W rose 0.3 percent in August, according to numbersreleased by the Labor Department today, showing a 1.9 percentincrease in inflation over the past 12 months.

In July, the reading showed a decrease in inflation of 0.1percent and a 12-month increase in inflation of 1.6 percent.

To be clear, the numbers for September, the final third-quartermonth, will be needed to know for sure what the 2018 COLA increasewill be. That number will be released on October 13.

But economists and Social Security experts told BenefitsPRO thatinflation in September is unlikely to be substantial enough toraise the COLA to the SSA’s 2.2 percent median projection.

The disasters in Texas and Florida from hurricanes Harvey andIrma also present a wildcard on potential inflation readings.

The Labor Department said Harvey had a small impact on Augustinflation.

While the storms’ impact on gas prices, included in the CPI-Wreading, may not register until September’s reading, it is notexpected to be enough to move next year’s COLA to 2.2 percent.

“I don’t expect the severe weather to lessen the cost of goodsand services in September,” said Peter Weinbaum, a Social Securityconsultant who advises individuals.

“On the other hand, it would take a huge increase in Septemberto move the three-month average a lot higher, and some of the costsassociated with the hurricanes may not find their way into theCPI-W until sometime in the fourth quarter,” added Weinbaum, whoblogs at socialsecuritymaven.com.

Last year’s COLA increase of 0.3 percent will be deducted fromthis year’s third quarter CPI-W. Using only July’s number, Weinbaumsays the next year’s COLA increase would only be 1.5 percent.

Gas prices spike in Hurricanes’ aftermath

Hurricane Harvey shuttered one-third of U.S. refining capacityin the week following the storm.

Gas prices across much of the country quickly spiked. Accordingto the Lundberg Survey, the average price of gas rose 30 cents bySeptember 8 to $2.69 per gallon. That’s a 48-cent increase over ayear ago, according to reporting by the Associated Press.

The CPI-W measures inflation on food, energy costs, housing,clothes, medical, and transportation costs.

In August, increased costs of housing and gas accounted for theoverall inflation, according to the Labor Department.

Because the agency said Harvey had limited impact on August’sreading, the spike in gas prices is likely to register inSeptember’s reading.

The question is whether that will be enough to push inflationhigher to meet SSA’s 2.2 percent COLA projection.

“It's possible, but I kind of doubt it's enough to make a realdifference,” said Andrew Biggs, a resident scholar at the AmericanEnterprise Institute and a former deputy commissioner at theSSA.

Ultimately, the fallout from Hurricanes Harvey and Irma islikely to put some upward pressure on inflation, but not in time toimpact the third-quarter number used to set COLAs, says AdamKamins, a senior economist at Moody’s Analytics.

“The storms will likely put some upward pressure on inflation,but I don’t think it will push the number to 2.2 percent,” saidKamins. “Inflation has been low for a while because wage andproductivity have been weak. The storms won’t be enough to offsetthat.”

Gas prices may indeed stay higher, said Kamins. Moreover, thedestruction in Texas and Florida will require massive rebuildinginitiatives. That can be expected to increase the demand for laborin those states, potentially putting upward pressure onconstruction wages.

“There was already a shortage of construction workers in each ofthose fast-growing states. Now there will be more pressure on labordemand with the shortage of supply of workers,” said Kamins.

Insurance premiums can be expected to rise for all consumersafter Harvey and Irma. But in each case, Kamins thinks the impactof the storms on inflation will lag into next year, not in time tomaterially affect the COLA adjustments for 2018.