An OPEC meeting that ended this week revealed serious splits in the international oil cartel, suggesting that production quotas that have barely stabilized oil prices since midsummer are fragile, at best. In any case, Wyss noted, if energy and the volatile food price measures had been removed from the index, consumer prices would have been increasing at a moderate 3% to 3.5% for the past three years.
Martin Mauro of Merrill Lynch likewise predicted a steady-as-you-go 3% to 3.5% inflation rate for the time being, so long as oil prices are stable instead of declining. He noted that the September index had a few anomalies, such as sharply higher apparel prices--up at a 7.8% annual clip in the third quarter, perhaps in part because of dollar-driven higher import prices--and an unexpected September decline in the cost of school fees and school supplies. "Apart from those funny things, taken together it means more low inflation," Mauro said.
$6 Average Increase
Announcing the Social Security benefits increase effective next year, Commissioner Dorcas R. Hardy said that recipients would receive increases averaging $6 in their Jan. 2 checks. In the case of Supplementary Security Income beneficiaries, similar 1.3% increases will show up on checks mailed Dec. 31.
The increases mean that those now receiving a maximum benefit of $760 next year will receive $769; that the average retiree receiving $482 will get $488; that an elderly couple receiving $822 will receive $833. Early retirees under 65 will be able to earn $6,000 and retain all Social Security benefits, up from the present ceiling of $5,760, and persons over 65 can earn $8,160 in outside income and retain all benefits, up from $7,800. Retirees over 70 can retain all benefits, no matter how much outside income they earn.
The 7.15% payroll tax paid by all wage earners to finance the Social Security system remains unchanged, but the top wage base on which that tax is levied will rise from $42,000 to $43,800. The resulting $128.70 tax increase will affect some 8.5 million workers next year, Social Security spokesman James M. Brown said.