Inflation December 2021 | General financial discussion | Discussion forum

6% increase for oranges and they are not very good this year. l am really interested to see what the bank of canada does next week.

I guess nothing has changed - some of us see it as transitory and some don't and that's fine. Lets wait and see what Macklem says next week.

It still looks like it could be transitory.

If one puts the December CPI of 144.0 on the graph, one can see that prices fell in December:

Whatever was propelling prices along the red 6%-per-annum line since January 2021 had dissipated by August. Since August, prices have been climbing at a much more moderate rate, closer to the brown 2.6%-per-annum line.

christinad said
6% increase for oranges and they are not very good this year. l am really interested to see what the bank of canada does next week.  

I watch the TV show, "Boom and Bust" hosted by Tony Clement. I find it thought-provoking, at times. One episode discussed what is driving inflation. If it is transitory and primarily a result of supply-chain issues, then all the rate increases in the world cannot solve the physical problem.

Another idea raised was the notion that people are losing faith in the value of the Canadian dollar and trying to crystalize their monetary wealth into hard/structural products such as houses to retain value.

christinad said
Would i create a huge controversy to say inflation is not transitory? 🙂

Does it really matter whether or not inflation is transitory, if people act as if it is (or isn't), regardless of the facts?

Alexandre said

This article is behind the paywall and I won't be paying to read it, but my grocery bill disagrees with that optimism.

So does my heating bill that just came with the notice "natural gas prices increased 25% comparing to previous year."

So does Amazon, where I keep the list of regular necessities I am ordering online, and can compare current prices with pricing of same products I've ordered previously.

I am also noticing grocery store "price adjustments," which are noticeably up, specifically in December and January.

Yes, I know, it is an anecdotal evidence, but this is what I have to live with.  

I am with you. For what I consume, the price went up not down in December....

christinad said
I guess nothing has changed - some of us see it as transitory and some don't and that's fine. Lets wait and see what Macklem says next week.  

Some of us see it as some of both. Some of it remains transitory supply chain issues while some of it will not go away due to potentially permanent changes in the supply chain, e.g. more inventory as compared to JIT inventory, less outsourcing, more domestic buying to reduce hostage taking, etc. IOW, risk reduction at the price of higher cost inputs. Some of the 'inefficiencies' will likely be permanent.

Example: Auto manufacturers made a huge mistake cutting back on their orders of chips in 2Q2020. The bean counters didn't want that inventory accumulating with impacts on the bottom line....and it has cost those manufacturers dearly. Toyota not so much since they mostly kept their supply chain alive. That has caused huge increases in the value of used cars on a temporary basis. I have an old 2007 vintage car I will be selling in March. It's value is well over what it was worth almost 2 years ago but that will go away as soon as dealer lots are full of new cars again.

Example: Trucking firms need to start paying more to fill the driver shortage. As of now, there are not enough drivers to keep the supply chain going. It will take months to get new drivers on the road.

One area of more likely permanent change will be the ongoing and probably increasing impacts of climate change that would have occurred regardless of anything else. Weather events are causing havoc in the supply chain through destruction of crops, interruption of logistics, etc.

christinad said
I certainly hope some of it is transitory. I need a new dishwasher and prices have rose by 10% and there isn't a lot of stock. Something i never thought of that will be impacted are my strata fees and i am concerned by how much they might increase. I am looking forward if interest rates increase that i can make a little more money.  

when my inlaw needed a new washer for her condo (specific shape required), only 2 models are available. Both ended up OOS for 3 months (was told 1 month initially.)
So if you do need ur dishwasher regularly and soon, keep that in mind. Pandemic affect everything big or small unfortunately..