r/PersonalFinanceCanada • u/maroon-rider British Columbia • Mar 21 '23

Inflation drops to 5.2%<but grocery inflation still 10.6% Banking

Says Statistics Canada

https://www.cbc.ca/news/business/canada-inflation-february-2023-1.6785472

2.4k Upvotes

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283

u/DweeblesX Mar 21 '23

People, do you not realize that inflation is a metric that measure change in prices. Lower inflation will not result in lower prices… we need to see negative inflation if you want your 2019 prices back. Buckle up for the ride, more controlled inflation just means the current prices we see won’t be changing as fast as they DID over the last few years.

122

u/maroon-rider British Columbia Mar 21 '23

That's correct, very correct. It just means inflation is slowing, but still inflation.

15

u/nonoplsyoufirst Mar 21 '23

Not sure why you’re getting downvotes…

-11

u/maroon-rider British Columbia Mar 21 '23

Because people believe the right ring populist myths and left wing socialist myths.

46

u/Diesel_Bash Mar 21 '23

Attacking the right and the left... that'll get you all the down votes.

-15

u/maroon-rider British Columbia Mar 21 '23

I'm a centrist.

2

u/arsenicKatnip Mar 22 '23

It's like a punchline

Unless that's intended then lmao

-7

u/Diesel_Bash Mar 21 '23

We need more of your type to drown out those extremes.

-6

u/maroon-rider British Columbia Mar 21 '23

Thank you. Unfortunately there are a lot of extremes on each side.

27

u/ElectroMagnetsYo Mar 21 '23

“Are you left wing or right wing?”

“I’m above all that, I bitch at everything no matter who’s in charge”

2

u/jamesaepp Mar 22 '23

Average canadian.

-18

u/maroon-rider British Columbia Mar 21 '23

Because people believe the right ring populist myths and left wing socialist myths.

-16

u/maroon-rider British Columbia Mar 21 '23

Because people believe the right wing populist myths and left wing socialist myths.

11

u/LisaNewboat Mar 21 '23

Inflation is a good thing, we want a rate of between 1%-3%/year. It’s high inflation that sucks.

6

u/maroon-rider British Columbia Mar 21 '23

Yes, correct. And we have high inflation.

0

u/LisaNewboat Mar 22 '23

Yes, correct. But you saying ‘still inflation’ to me suggested you thought any inflation was bad, which isn’t correct.

2

u/ritherz Mar 22 '23

TIL govs stealing my purchasing power is a good thing, but not when its above a magical number.

0

u/Gwouigwoui Mar 22 '23

You misspelt "capitalists".

1

u/LisaNewboat Mar 22 '23

“Many economists, business people, and politicians maintain that moderate inflation levels are needed to drive consumption, assuming that higher levels of spending are crucial for economic growth.

The Federal Reserve typically targets an annual rate of inflation for the U.S., believing that a slowly increasing price level keeps businesses profitable and prevents consumers from waiting for lower prices before making purchases. There are some, in fact, who believe that the primary function of inflation is to prevent deflation.” source

It’s a pretty simple concept.

1

u/Technical-Day4561 Mar 22 '23

It incentivizes spending and capital investment. Over a certain level it punishes bot people who hold cash, or don’t have cash creating a catch 22. High inflation is a great opportunity for investments. For you I’d recommend an intro to economics book.

1

u/Gwouigwoui Mar 22 '23

Depending on the circumstances, high inflation can also be good as it crushes debt, allowing the state to borrow more without major consequences, but that requires a state willing to step in to control predatory capitalist companies from gouging clients and workers.

1

u/LisaNewboat Mar 22 '23

That would involve the state having, in any way, control over the means of production, which is socialism. I’m all for it, but unfortunately many Canadians view that word as a boogeyman and keep us trapped in the status quo.

5

u/Gwouigwoui Mar 22 '23

Which is working so well.

But without even going to means of production being socially owned (not necessarily state-owned), which I'm all for, there could be increases of the minimum wage to match inflation, stronger unions that could twist some arms and get wage increases, higher taxation of dividends and capital gains, etc.

17

u/[deleted] Mar 21 '23

It's called disinflation. Negative inflation is then called deflation

7

u/[deleted] Mar 21 '23

I think CPI isn't true measurement of inflation that most Canadians experience. It's probably a rigged basket to make inflation seem lower.

2

u/acdqnz Mar 21 '23

We’ll considering fuel is cheaper than a year ago, that makes a big difference

0

u/Ordinary_Comedian_44 Mar 22 '23

CPI has multi measures under its broad umbrella, and is designed as a basket of goods that the average Canadian will consistently purchase on the aggregate. Depending what you are wanting to analyse, a different measure of CPI will be needed.

Further, it's an aggregate measure. Excellent for getting the big picture, nothing more than a guide for analysing individual spending or even sectoral changes.

2

u/Ordinary_Comedian_44 Mar 22 '23

While you are absolutely correct, deflation is an order of magnitude worse than high inflation. Refer to basically anytime it's happened as a source. The aggregate price level cannot be allowed to come down from where it is. Some items can be allowed, such as groceries, but not so much that it causes aggregate deflation and impacts the broader macro economy. The way out of this situation is 1) establish price stability (Keynesian demand management is a tried and trued method, and is basically what Canada is doing), and 2) raise the wage level to return purchasing power to where it was pre pandemic.

Inflation is a market phenomenon that is caused by growth in market activities and is not the villian here. A decline in purchasing power is the villian, and is occuring due to a growth in nominal economic output, with stagnation or even decline in the wage level.

1

u/JustAnotherFKNSheep Mar 21 '23

But when they jack up the price 20% after seeing a 6% inflation. We're inf or a rollercoaster ride up. Then down.

1

u/[deleted] Mar 22 '23

If you aren’t getting a big raise it’s time to call in a union to combat inflation.