Millions of Social Security beneficiaries received a 2.5% boost to their benefits in 2025, thanks to an annual cost-of-living adjustment that went into effect in January.

In 2026, Social Security checks may go up by the same amount — 2.5% — based on the latest government inflation data, according to new estimates from both The Senior Citizens League and Mary Johnson, an independent Social Security and Medicare policy analyst.

That is up from the 2.4% increase for 2026 that those sources forecast last month. A 2.5% cost-of-living adjustment would be “about average,” according to Johnson.

The Social Security cost-of-living adjustment, or COLA, is an annual adjustment to benefits aimed at helping to ensure monthly checks keep pace with inflation.

The COLA for the following year is calculated based on third quarter inflation data. The official change is typically announced by the Social Security Administration in October.

With four more months of data yet to come before that calculation, the new estimate for the Social Security COLA for 2026 is subject to change.

The COLA may go higher if President Donald Trump’s tariff policies prompt inflation and consumer prices move higher, according to Johnson.

Broadly, the consumer price index rose less than had been expected in May, with an annual inflation rate of 2.4%, showing limited impact from Trump’s tariff policies.

The measure used to calculate the Social Security COLA — the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W — is up 2.2% over the past 12 months, according to the May data.

While that inflation rate is lower than the 2.5% COLA for 2025, a Senior Citizens League survey finds 80% of seniors feel inflation in 2024 was more than 3% based on their expenses.

As the Trump administration has reduced the size of the federal work force, that has also led to changes in the way the Bureau of Labor Statistics assesses inflation. The government agency has restricted data collection and turned to models that help fill in incomplete data.

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The Senior Citizens League has raised concerns that those changes may negatively influence the accuracy of the annual Social Security COLA calculations.

“Inaccurate or unreliable data in the CPI dramatically increases the likelihood that seniors receive a COLA that’s lower than actual inflation, which can cost seniors thousands of dollars over the course of their retirement,” Shannon Benton, executive director at The Senior Citizens League, said in a statement.

The Bureau of Labor Statistics did not immediately respond to CNBC’s request for comment.

President Donald Trump‘s proposal for a new savings account for children with a one-time deposit of $1,000 from the federal government just got an important stamp of approval.

At the “Invest America” roundtable at the White House this week, several top CEOs, including Michael Dell and Goldman Sachs chief David Solomon, expressed support for “Trump Accounts,” which are part of the landmark Republican-backed “big beautiful bill” moving through Congress. The executives committed to contributing to the accounts of their employees’ children, and, in Dell’s case, matching the government’s seed money “dollar for dollar.”

Still, policy experts and financial advisors question whether the provision is the most effective way to save on behalf of your child.

Under the House measure, Trump Accounts — previously known as “Money Accounts for Growth and Advancement” or “MAGA Accounts” — can later be used for education expenses or credentials, the down payment on a first home or as capital to start a small business. Earnings grow tax-deferred, and qualified withdrawals are taxed at the long-term capital-gains rate.

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Trump’s massive tax and spending bill still faces a battle in the Senate, but if it passes as drafted, parents and others will be able to contribute up to $5,000 a year to a child’s Trump Account. The balance would be invested in a diversified fund that tracks a U.S.-stock index.

Sen. Ted Cruz, R-Texas, who spearheaded the effort, told CNBC in May that the accounts give children “the ability to accumulate wealth, which is transformational.”

“This will afford a generation of children the chance to experience the miracle of compounded growth and set them on a course for prosperity from the very beginning,” the White House also said in a statement Monday.

Some experts say the biggest benefit of Trump Accounts is the seed money for all children born between Jan. 1, 2025, and Jan. 1, 2029, funded by the Department of the Treasury.

There are no income requirements. To be eligible, the child must be a U.S. citizen and both parents must have Social Security numbers.

Although some states, including Connecticut and Colorado, already offer a type of “baby bonds” program for parents, Trump Accounts — along with a bigger child tax credit proposed in the budget bill and potential employer-sponsored matching funds — “could certainly help a lot of families at a lot of different income levels,” Sam Taube, NerdWallet’s lead investing writer, recently told CNBC.

Invested in a broad equity index fund for 20 years, a $1,000 government grant for newborns could grow to an average $8,000, according to a March report from the Milken Institute. “If the policy also permitted a tax-deductible match by employers of the children’s parents, such initial matches would double an account’s value,” researchers wrote.

With Trump Accounts, “the costs are the key,” he said: “If it keeps adding to the deficit, it is not sustainable.” (By some accounts, the program could cost more than $3 billion a year.)

“The biggest challenge for this country right now is that we have lived beyond our means,” he said. “Over the last 230 years, Congress has passed countless programs like this, which provide short-term benefits that are almost invariably dwarfed by the long-term costs.”

Universal savings accounts, which allow for more flexibility, would be a better proposal than the House provision, said Adam Michel, director of tax policy studies at the Cato Institute, a public policy think tank.

Universal savings accounts have had bipartisan support going back as far as the Clinton administration, and without the initial deposit, would come a much lower cost. They have also been successfully implemented in other countries, including Canada and the United Kingdom, according to the Tax Foundation.

Further, Trump Accounts are “overly restricted and needlessly complex,” Michel said. “A simpler system is a better way to get people to save.”

With a universal savings account, individuals could contribute up to $10,000 of after-tax income a year and withdraw the funds tax-free at any time for any purpose, according to Michel.

“It’s the flexibility that entices people,” he said. “Maybe you want to use that money to start or expand a business or buy a house or an investment property — let people choose what’s best for their lives.”

Another alternative is a tapping 529 college savings plan, which nearly every state offers.

These 529 plans have much higher contribution limits, earnings grow on a tax-advantaged basis, and when a child withdraws the money, it is tax-free if the funds are used for qualified education expenses. This year, individuals can gift up to $19,000 to a 529, or up to $38,000 if you’re married and file taxes jointly, per child without those contributions counting toward your lifetime gift tax exemption.

Although there are more limitations on what 529 funds can be applied to compared to Trump Accounts, restrictions have loosened in recent years to include continuing education classes, apprenticeship programs and student loan payments.

“For most parents, like myself with teens, the 529 college savings plan is superior if you’re focused on paying for higher education because of the federal tax-free growth,” Winnie Sun, co-founder and managing director of Sun Group Wealth Partners, based in Irvine, California, recently told CNBC.

“Also, now, the 529 is becoming more flexible with its’ ability to have unused funds rolled into a Roth IRA in the future for retirement,” said Sun, a member of CNBC’s Financial Advisor Council. 

As of 2024, families can roll over unused 529 funds to the account beneficiary’s Roth individual retirement account, without triggering income taxes or penalties, so long as they meet certain requirements.

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While the unemployment rate in the U.S. is still fairly low, data shows it’s not uncommon to see individuals job hunting for extended periods of time.

The unemployment rate remained flat at 4.2% in May, the Bureau of Labor Statistics reported Friday.

However, over the past six months, it’s become “drastically harder to find a job,” whether you’re entering the job market for the first time or you’ve been looking for a while, according to Alí Bustamante, an economist and director at the Roosevelt Institute, a liberal think tank.

“It’s not that folks are losing their jobs,” Bustamante said. “It’s just that businesses are much more reticent to hire people, to make investments, because they just feel this very uncertain economic climate.”

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Bustamante and other economists say several data points beyond the headline job market numbers — the job-finding and quits rates, the share of workers who have been unemployed for 27 weeks or more, a broader rate of unemployment and the state of so-called “white collar” jobs — showcase deeper issues within the labor market.

“Employers aren’t hiring, they’re not firing. People aren’t leaving their jobs, and there’s just fewer opportunities right now,” said Cory Stahle, an economist at Indeed, a job search site.

As career coach Mandi Woodruff-Santos put it during a recent interview with CNBC: “The job market is kind of trash right now.”

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The quits rate was at 2.0% in April, little changed from 2.1% in March, both numbers seasonally adjusted, according to the latest Job Openings and Labor Turnover report by the Bureau of Labor Statistics. The number of quits was down by 220,000 over the year.

Hiring activity has also been down in recent years. The rate of hires was at 3.5% in April, little changed from 3.4% in March, both seasonally adjusted, per the JOLTs report.

As people stay put in their jobs and employers are reluctant to hire, such factors create a “low hiring, low firing” environment, Stahle said.

The share of unemployed workers facing long-term unemployment — those who have been jobless for at least 27 weeks — was a seasonally adjusted 20.4% in May, according to the bureau’s latest data. That’s down from a seasonally adjusted 23.5% in April.

But the recent decline may not be an improvement. It could be signaling that a large number of long-term unemployed workers left the labor force altogether, he said. 

Considering that 139,000 jobs were added in May and about 218,000 workers are no longer in the unemployment cohort, there’s a significant gap of workers who were unemployed but did not secure new roles, Bustamante said.

What’s more, the number of people not in the labor force jumped by 622,000 in May.

“All the data point to long-term unemployment declining because people left the labor force,” Bustamante said.

The U-6 rate includes the total number of unemployed workers, plus all marginally attached workers, and the total employed part time for economic reasons.

Marginally attached workers are those who are neither working nor looking for a job — but indicate that they want and are available for work, and looked for a new role recently. There’s a subset of this group called discouraged workers, or those who are not currently looking for a job due to labor-market reasons. 

People employed part time for economic reasons are those who want and are available for full-time work but settled for a part-time schedule. 

As of the latest BLS data, the U-6 rate remained unchanged from April at 7.8%.

This data tells us that more and more Americans have either stopped looking for work out of labor-market frustrations, or are picking up part-time gigs to get by financially, experts say.

On the other hand, industries such as health care, construction and manufacturing have seen consistent job growth. Nearly half of the job growth came from health care, which added 62,000 jobs in May, the bureau found.

“There’s been a divergence in opportunity,” Stahle said. “Your experience with the labor market is going to depend largely on the type of work it is you’re doing.”