dwot (99.57)

Consumer prices...

August 14, 2008 – Comments (4)

Bad, really bad..

"The department's Consumer Price Index, the most commonly used inflation gauge, rose 0.8 percent in July and on a year-over-year basis jumped 5.6 percent, its strongest advance since January 1991 when the first Gulf War was occurring."

No question that I just shake my head by the prices I see.

What is really interesting to me is that going north gave me some price shocks at some of the differences, 4 liters of milk in Vancouver can be had for under $4.  It is $9 up north.  But a lot of other prices were within 10-20%.  My room mate who is from eastern Canada had huge price shock.  He'd describe prices at home and I'd shake my head at the difference compared to Vancouver.

When you have housing and real estate out of line with wages the rest also seems to get out of line with wages.  All that commerical property has higher carrying costs, so they do get passed on to the consumer.  

People that had a home before Vancouver's housing costs took off have only had to deal with consumer goods, but it has been brutal to those that weren't established.

I remember chatting with a woman about 10 years ago who had an office job and owned a two bedroom condo.  She was probably 5 years older then me.  I remember her saying that she'd always managed but in the past couple years it had gotten very hard.  That would have been the period that our 93 real estate bubble and carrying costs were working their way into the economy.

So, I suspect there will be very unequal increases in the cost of living.

Also, I did a post about where the consumer price index is set to 100.  When I went back and looked at the data, well, it made no sense, but I didn't understand why.  Every year in BC they'd be feeding us this garbage that our price increase rate was less then other places in Canada.  This was huge in making it so that unions had reduced negotiating power.  Dumb unions had poor economists.  But, when I really studied how those numbers came out, well, the standard was set when BC was at a top.  All of our enormous increase were just kind of tossed.  So, set price increase comparison for Canada after we've seen, like double, and yes the price increases slow down.  Manitoba was at a low, so they were showing 3.6% where BC was showing 1.7% kind of thing.

That is another reason why the price increase data is garbage.  Local economies are not rising and falling in sync.  If your city is at a top when the numbers are reset, well, they will lie more.