Something Something Inflation

What’s going on?

Data out on Friday showed inflation in Europe surged to a 13-year-high last month, and we can probably just go ahead and copy/paste at this stage, right?

What does this mean?

Europe’s story is much the same as everyone else’s: the same supply chain disruptions have been forcing the region’s companies to pass higher costs onto customers, and the same energy shortages sent gas prices to record highs on Friday. That drove consumer prices up 3.4% in September versus the year before. And even if you strip out unstable costs like food and energy, prices still rose by 1.9% – the biggest jump in the metric since 2008. This isn’t going away either: energy prices alone are set to climb even higher after China said last week that it was willing to go to whatever lengths necessary to secure supplies for winter.

Why should I care?

Zooming in: Do you even, like, need a salary?

Germany is in particularly deep schnitzel: inflation in Europe’s biggest economy hit its highest level for nearly three decades, with prices up 4.1% on the year before. So, uh, you’d think German workers might’ve given a little more thought to macroeconomic trends before going on strike to demand fair pay. Economists are worried that if wage increases spread across the region, it’ll push up prices even more and magnify the problem.

The bigger picture: A shortage here, a shortage there.

Another day, another shortage – this time silicon, which has fallen victim to yet another production cut in China as it tries to curb power consumption. That’s caused the price of the second-most abundant material in the world to skyrocket 300% in the last two months. And given that silicon is used in everything from microchips to concrete, that could prove costly for companies and consumers alike.

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Originally Posted on October 1, 2021 – Something Something Inflation