Inflation in Canada is picking up, in fact Canada inflation strongest pace in a decade just showed up. Most of this inflation of course is due to rising costs of food and energy and let’s not forget shelter. What about insurance and education? Well yes that too is on the rise but the government insists inflation is under control. I don’t know about you but it sound to me like the government is losing control.
So what does this mean for the economy? For one thing rising inflation is not good for anybody. Inflation eats up the spending power of your money. Could it be that all that money printing over the last decade is starting to work it’s way into economy. Could be. The underlying inflation trends appear to be firming with the average of the core measures of inflation at their strongest pace in a decade.
Excluding gasoline, which had been weighing on overall inflation in recent months, the consumer price index was up 2.3 per cent compared with a year ago, matching the increase in October.
And, the average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures and are closely watched by the Bank of Canada, was 2.17 per cent compared with a revised figure of 2.10 per cent for October.
Canada Inflation Strongest pace in a decade
Canadian underlying inflation hit the highest in a decade in November. Meanwhile the economy is slowing down and the drag on oil prices and falling real estate prices are the cause. Real Estate in Canada takes up a massive chunk of economic activity. Reports came out for the outlook for Real Estate in 2020 and the charts don’t look good. It is showing price declines of 1 or 2%. If inflation picks up more and house prices drop farther Canadians could be in for a debt shock. The average Canadian is in debt up to his or her eyeballs. If inflation strikes at the same time of a Real Estate decline it will have a double whammy effect on their wallet.
Of course they are predicting wages to rise also but know one really knows for sure. Let’s face it there is just too much crap going on in the world right now. Who knows what the final act of this drama might be? Happy ending or just episode 1 in a long and dramatic series of economic chaos. One thing for sure the interest rates always rise if inflation hits too hard. A few points up in the interest rate chart will drive down home prices even faster and farther. A lot of people would like a little higher interest rates especially the zoomers. Retired people need that extra income instead of having to greet shooters at the Walmarts.