Inflation is cooling. The cost of living crisis is not
Inflation is cooling. The cost of living crisis is not
Inflation cooling is "things getting worse, less fast", not "things returning to how they were."
If my rent goes from 1000 a month to 1500 a month from one year to the next, that's 50% inflation. If it stays at that higher amount for a full year afterwards, that's 0% inflation. But that doesn't mean I'm suddenly living the good life. I just went a full year with my rent way higher than I used to pay, and my income did not increase proportionally. I am able to save less (if at all), can't afford things I used to be able to, and feel just a little more desperate every month.
That's why looking at year-over-year inflation is meaningless. It doesn't reflect the long-term hardships that come from a sudden price spike that never goes back down.
That’s why looking at year-over-year inflation is meaningless.
It's not meaningless, but like any economic indicator you need to be very careful with the conclusions you draw from it.
BC assessment gives you a nice 10 year graph of assessed values when you click on a property. From what I've seen it's about a 2x to 3x increase over the last 10 years, in my region at least.
I clicked on a random property, but this is typical for my whole city.
Thats my experience as well.
Looking at realtor.ca and seeing previous year selling prices vs current price, and having looked at condos/townhouses in 2013/2014 and seeing those same places going for at least 2x now.
I've been living in the same rental for awhile so rent is cheap for me, but if I ever have to move its going to suck, and while I can afford to buy something here, it doesn't seem worth the massive amount of debt for what you get.
It's disheartening for those who will never be able to buy, and it's disheartening even for those who could.
It just sucks all around.
Seeing as the government considers deflation to be not an option, the only practical fix to the crisis is a general wage gain across the entire workforce equivalent to the inflation we've been seeing the past couple of years. More, really, seeing as inequality had been growing prior to the pandemic as well. Prices are not going to go down. And if deflation is threatening to occur, the government will move heaven and earth to stop that from happening. Ergo, wages need to go up.
Or maybe we could move away from this irrational system, but one step at a time, I suppose.
In the US, the fed's stated strategy is to keep wages down. It does not have a lot of tools to deal with inflation, so it raises interest rates to inhibit growth until inflation is under control- the "soft landing." Legislation is needed in order to handle this problem, because wages will quickly be absorbed by increasing prices unless we can capture corporate profits with progressive taxation. I imagine the situation is similar in Canada but I'm not well aware. Remember to vote.
In the US, the fed’s stated strategy is to keep wages down.
It's not their stated strategy but it's probably safe to assume they subscribe to the baseless "wage price spiral." The bottom line is that there is still a LOT of stimulus money circulating, keeping inflation high. Ideally this would be targeted with a tax on the wealthy, but in the absence of that, the Fed has to use their very blunt tools. I don't see inflation improving until there's a recession.
Inflation isn't cooling... the government is just trying to say it is.
We're all slaves to corporate profits. Companies have become our religion.
Don't gods usually promise some kind of reword for observation?
No you get the fucking stick!
Religion? No. Monarchs? Yes.
This is the best summary I could come up with:
"We have seen the annual rate of inflation has started to come down, but that doesn't mean that the level of prices is not [still] unaffordable for a lot of people," said CIBC senior economist Andrew Grantham.
Rents may now be the biggest concern on the Canadian inflation front," wrote BMO's chief economist Douglas Porter.
August to September data highlights how impactful even a minor rate increase is on affordability," said James Laird, co-CEO of Ratehub.ca and president of CanWise mortgage lender.
Consumers and especially businesses surveyed by the Bank of Canada say the full weight of all those rate hikes has yet to fully hit the economy.
Karl Schamotta, the chief market strategist of the financial payments company Corpay, says many experts believe Canada is headed for a soft landing (a scenario where the economy slows enough to get inflation under control but not so much that it slips into a recession).
Grantham says if we really are through the worst of the inflation crisis, then maybe the Bank of Canada can start gradually lowering borrowing costs.
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Grantham says if we really are through the worst of the inflation crisis, then maybe the Bank of Canada can start gradually lowering borrowing costs.
Pretty much no central bank ever lowers rates early enough to prevent a recession. The US has been teasing the tip of one for a year now, with rates going up. By the time they react and lower rates it will be way too late.
No you get the fucking stick!