According to the Bureau of Labor Statistics the national inflation rate is still trending upward. Of course anyone who has been grocery shopping lately could tell you that, but, the BLS reports that the Consumer Price Index for April is up 0.8 percent over the March CPI, which bodes well for COLA in 2012.
This is important for military retirees, and those drawing VA benefits, because the CPI is the indicator used to determine the annual cost-of-living-adjustment (COLA) and adjustments to VA Disability and Compensation,Vets Pension, and other VA rates for the following year.
According to the Military Officers Association of America (MOAA) the April 2011 CPI is up 2.9% from the 2008 CPI. The 2008 CPI will be used to calculate the 2012 COLA since there has been no COLA since 2009. This means that if the trend continues the COLA for 2012 could be quite substantial. This will also mean an increase in VA Compensation and Pension programs as well as social security rates.
Check out MOAA's COLA Watch for the latest trend analysis.