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Email this10:46 am
October 29, 2017
Offline11:39 am
April 6, 2013
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Over two years, all-items CPI inflation is averaging under 2% per annum:
| July 2019 | July 2020 | July 2021 | |
| All-items CPI | 137.0 | 137.2 | 142.3 |
| 0.1% | |||
| +3.7% | |||
| +1.9% per annum | |||
12:36 pm
October 29, 2017
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You can’t really average the years. It looks better for inflation, for sure, but the point of using year over year is that it shows the current rate we are dealing with. 0.1% increase last July is irrelevant to the costs now. That’s like saying if we have zero inflation for 9 years and then 10% inflation in year 10 averages to only 1% each year! It looks good, but you are paying 10% more for the basket of goods compared to last year and that’s too much. That’s why the relevant inflation is calculated year over year and not monthly or several years.
EDIT: it’s also, why the CPI base year is moved up every once in a while. CPI would look nuts if the base year was 1919.
12:57 pm
September 11, 2013
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I tend to agree on this one, Vatox. Seems to me communications technology today means things that used to take years now happen in a week, things now flare up into full-blown inferno, happen very quickly, is my impression.
1:55 pm
October 27, 2013
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I agree with Norman even if 1.9% isn't quite right (slightly less than 1.9% each year due to compounding). It is disappointing how folks don't understand 'smoothing' (or prefer not too to argue their position) to characterize the Mar 2020-May 2021 pandemic properly. We will keep hearing this nonsense until about next May 2022 I think.
3:24 pm
October 21, 2013
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From everything I've read, "most" people spend most of what they get, even high income people. They don't accumulate based on the notion that inflation may jump significantly a year or two down the road. So, the impact is significant, no matter what year it happens or what the rate was the previous year
That said, I'm not "most" people. It hasn't really been affecting me particularly - yet.
4:30 pm
February 27, 2018
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I live in the here and now, dealing with today's inflation rate.
For you others... 1273 AD to 2021, inflation 3221%.
5:23 pm
March 15, 2019
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I vaguely recall hearing the BOC saying that inflation is a temporary "blip" and no cause for concern. The problem is once inflation starts we could get the "snowball effect".
5:28 pm
April 6, 2013
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AltaRed said
I agree with Norman even if 1.9% isn't quite right (slightly less than 1.9% each year due to compounding). It is disappointing how folks don't understand 'smoothing' (or prefer not too to argue their position) to characterize the Mar 2020-May 2021 pandemic properly. We will keep hearing this nonsense until about next May 2022 I think.
Yes, the lack of understanding is quite startling.
I'm actually paying over 45% more for gas. Never mind the inconvenient fact that dramatic 45%+ increase to $1.25/L is from the 85¢/L, to which gas fell from the $1.20/L before the pandemic.
5:39 pm
April 6, 2013
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COIN said
I vaguely recall hearing the BOC saying that inflation is a temporary "blip" and no cause for concern. The problem is once inflation starts we could get the "snowball effect".
There won't be a snowball effect because there is no long term shortage of supply or excess demand.
Lumber prices, for example, went up by 4X and then came crashing down by 70% in a matter of weeks. People got smart. They realized that deck renovation didn't have to be done this summer and they didn't need to get scalped by the lumber industry.
5:57 pm
September 11, 2013
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Not a few weeks, and maybe at wholesale level, but retail lumber prices soared 2020 summer (if you could get it) and as of today (at least in my town) are still way up from pre-pandemic levels. It will take some time (next year?) for the retail price to come down, is what I've been told by contractors, retailers. Guess we'll see.
8:41 pm
April 6, 2013
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Yes, it will take some time for the retail lumber prices to come down.
The retailers paid the lumber mills the 4X-last-year prices for their current inventory. They are not keen to sell that inventory for 70% less.
Eventually, the retailers won't have a choice. If my $15,000 deck reno project is now going to cost me $60,000 because of retail lumber prices, I might be tempted to take a few weeks off work, rent a pickup truck, and drive a few days to a lumber mill to pick up the lumber to capture a large chunk of that $45,000 price difference!
9:05 pm
March 15, 2019
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The BOC printed a lot of money to pay for pandemic relief. That has to come back in higher prices at some point.
1:36 am
October 21, 2013
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There are some other factors at play in prices/inflation.
It has been reported that an unusually high number of employees in various jobs have decided to retire sooner than they expected due to the pandemic. Work has become too difficult to conduct or too dangerous and they thought this was a good time to call it quits. This has created labour shortages, resulting in labour shifts, with people moving on to fill vacated spots and seeking higher wages. My dentist is one such casualty. Faced with the necessity to revamp how his practice operates and invest in new protocols, he decided to pack it in. A doctor friend has decided to quit five years earlier than he had previously intended, although in good health. These professional exits won't directly affect inflation, but they are indicators. Those who are in a position to retire are giving it serious thought and some are moving up the date.
Immigration has more or less come to a halt, Afghan refugees aside (only a trickle so far and hard to say how man will actually get here), so there aren't as many people for the entry level drudge jobs. The "temporary" foreign workers programme has also been affected, especially in agriculture.
It has also been reported that both new and used cars are scarce. I heard on the radio that some used cars are almost as expensive as new ones, and the line-up to get new ones is moving slowly.
There are also problems in the agricultural sector. Climate issues in California and the prairies will affect crops, which affect prices - upwards. Moreover, as these are issues related to climate change, they will not be going away, will only increase.
These are just some of the issues that have come to my attention. They aren't all short term. And the pandemic is by no means over. There are many countries with very low vaccination rates. Their vulnerability will affect international trade and travel until such time as the pandemic is subdued; and those things affect inflation.
6:06 am
September 11, 2013
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LOTS of our stuff comes from Asia, and due to outbreaks, lockdowns, etc affecting production plus shipping/receiving issues (e.g. check out what's happened with prices of shipping containers) there are shortages of all sorts of things (and their parts, components) we use daily, i.e. prices way up, if you even can get it.
Just one example: tried to buy a bicycle or get major parts for repairs in the last 12 months or so? Even amazon's selection is down about 95% seems to me, can hardly get anything except a bit of low-end junk from brands I've never heard of. Even Crappy Tire, always rotates sales on all their models, usually don't have to wait more than a week or two to get 40% or so off a particular bike, for a year now you rarely even see one in their weekly flyer, and of course at inflated prices for the few weird-models-no-one-wants available. They just aren't available, the few that are go to large USA retailers, Canadian small bike shops in big trouble. I've read and been told that this bicycle industry shortage will continue at minimum for another year, probably longer.
I personally don't see this changing until Asia's been vaccinated and the vaccines actually work really well against upcoming variants, which could be never. Takes a while to start up domestic production of all these things (prices would be WAY higher too), no-one willing to do it as long as there's a possibility Asia ramps up again soon. Result, that 3.7% number is a joke, from what I can see.
6:49 am
March 30, 2017
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Loonie said
These are just some of the issues that have come to my attention. They aren't all short term. And the pandemic is by no means over. There are many countries with very low vaccination rates. Their vulnerability will affect international trade and travel until such time as the pandemic is subdued; and those things affect inflation.
I am with Loonie that some of the price increases are not a blip and will stay no matter what happens to pandemic / excess / demand down the road.
Restaurants have mostly bump prices by 10-20% citing lack of labor, food cost, etc. Once the price goes up, it stays up. When was the last time you see restaurant prices go down in the last 50 years ? I do agree, they may not hike price again soon, so it smooths out a bit, but for how long to bring it to a real 2% avg inflation.
Same with lumber prices and cars, which are more sensitive to supply/demand. Once the "price expectation" has changed and set, there is no going back, as in discounts will be less regardless, used cars price get sticky etc
Even gasoline price at the pump is not retreating much, whether oil is at $150 a barrel or $65.
7:02 am
March 15, 2019
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"Just one example: tried to buy a bicycle or get major parts for repairs in the last 12 months or so?"
Just one small example. I'm fairly friendly with my local bike repair shop.
1) Cyclists are hanging on to their old bikes rather than buy new.
2) Cyclists are doing their own repairs as much as they can.
3) The price of a new inner tube is now $10-$12 whereas it used to be around $6.
4) Yes, getting parts from Asia is a challenge.
7:22 am
April 6, 2013
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COIN said
The BOC printed a lot of money to pay for pandemic relief. That has to come back in higher prices at some point.
No, it does not. Don't believe that silly picture of money chasing goods. People chase goods, not money. Once people use that replacement income to buy food, buy necessities, or pay their debt, the money is no longer in people's hands to chase goods with.
The European central bank and the central bank in Japan have tried for years to inflate their economies purposely by printing money, low interest rates, and quantitative easing. Hasn't worked when people were trying to stoke inflation on purpose. No reason the same things will stoke inflation now.
I suspect people read that equation backwards. Printing money doesn't cause runaway inflation. It is actually runaway inflation that causes printing of money as governments try to pay for stuff without the necessary increase in taxes!
7:49 am
April 6, 2013
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Loonie said
There are some other factors at play in prices/inflation.It has been reported that an unusually high number of employees in various jobs have decided to retire sooner than they expected due to the pandemic. Work has become too difficult to conduct or too dangerous and they thought this was a good time to call it quits. This has created labour shortages, resulting in labour shifts, with people moving on to fill vacated spots and seeking higher wages. My dentist is one such casualty. Faced with the necessity to revamp how his practice operates and invest in new protocols, he decided to pack it in. …
That's great for your dentist to retire early and perhaps doing something more enjoyable. But, there's no shortage of dentists.
Around here, dental clinics have been popping up in all the major malls and even in the small strip malls. If one's dentist retires, just go to the next closest mall or strip mall.
There's no shortage of labour for farm harvesting. The positions are just not competitive. I can get the same minimum wage working in an air-conditioned insect-free fast food restaurant, instead of working out in a field somewhere in the hot sun.
I think lots of the labour shortages are from lack of child care. That restaurant will have trouble getting their staff back when the kids are attending school remotely at home instead of going in person to school.
Yes, I've heard stories about restaurants hiking prices substantially. Supposedly, one restaurant in town hiked the price of their plates from something like $14.99 to $29.99! Well, good luck with that!
If that nice tenderloin steak at a restaurant goes from 5X the grocery store price to 10X, then it becomes really worthwhile for me to cook it myself at home.
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