Cost-of-Living-Adjustments (COLAs) from Federal retirement programs — such as Social Security — are based on consumer price indexes (CPI) produced by the Bureau of Labor Statistics (BLS), however, the agency hasn’t evaluated whether its data accurately reflects what certain groups pay, purchase, and shop.
“BLS has not evaluated the extent to which its existing data are adequate to produce CPIs that reflect what these subpopulations pay, where they shop, and what they purchase,” a recent Government Accountability Office (GAO) report said. “Officials cite budgetary reasons for not having done this, but there may be cost-efficient methods for evaluating the adequacy of these data.”
GAO made two recommendations for BLS, of which the agency agreed With one. GAO recommended that BLS seek more cost-efficient ways to evaluate the data sources used for subpopulation indexes. To do so, GAO says that BLS should engage “more directly with other stakeholders or seeking input from its advisory groups and other knowledgeable entities about approaches to expand data collection in a cost-efficient manner.”
The other recommendation – to which BLS disagreed – was to look at data from National Accounts to produce more accurate, timely, and relevant CPIs. BLS disagreed stating “that the National Accounts data are not a replacement for Consumer Expenditure Survey data.”