…Canada and the U.S. are showing significantly higher headline inflation than their peers. Initially it was sold as transitory, but that narrative is falling apart these days. Unbiased organizations are even forecasting the risk is now to the upside for Canada and the U.S….
G7 Headline Inflation By Country
- The USA: +5.1%
- Annual CPI growth reached 5.1% in August, more than 85% higher than the G7 average. Americans haven’t seen annual growth rise at this clip for over 13 years.
- Canada: +4.1%
- Annual CPI growth hit 4.1% in August, about 43% higher than the G7 average. Canada hasn’t seen such large annual growth in the past 18 years.
- Germany: +3.9%
- U.K.: +3.2%
- G7 Average: +2.86%
- Italy: +2.0%
- France: +1.9%
- Japan: -0.4%
Source: National Statistics Agencies; Better Dwelling
…The inter-governmental organization also stated inflationary risks are to the upside and that higher than expected inflation through next year is anticipated. Canada and the US are both operating with limited trade due to health restrictions. As these economies reopen, they might see an increase in demand for goods. This can drive prices and inflation to even higher levels of growth.
Canada and the U.S. are at two totally different points of recognizing the issue. Canada has so far stuck to the “transitory” narrative, attempting to dismiss it as an illusion. The U.S. recently expressed concerns that high inflation might be stickier than previously thought. The first step to solving a problem is admitting it, and Canada isn’t at that stage yet. ..
Both Canada and the U.S. have depended on inflation-driving tools for their recovery. They’ve depended on low interest rates to induce demand, driving inflation higher…[but] the problem with this strategy is that it is hard to slow inflation when it’s a byproduct of your recovery plan.
Editor’s Note: The original post by Stephen Punwasi has been edited ([ ]) and abridged (…) above for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.
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