Little miss worried-about-inflation

Good morning. “I don’t have any inclination to play,” said reigning chess champ Magnus Carlsen, giving up the world title he's held for almost a decade. Us regular folk will have to tough it out at our jobs, however, as I don't think that excuse works on most, if not all, of our managers. 

In this edition:🤑 Picnic basket of inflation👩🏻‍💻 TikTok is the new Google ☕️ Money Crush Monday

— Vindhya Kolluru, Editor

ECONOMY

The price isn't right 

Last week, Statistics Canada released inflation data for June 2022 and, no surprise, it was bleak. The Consumer Price Index (CPI) soared to a four-decade high of 8.1% in June, squeezing Canadians' budgets. 

• That's up from 7.7% in May. Excluding the price of gas, inflation rose 6.5% in the last year. Even worse, wages are falling behind the pace of inflation, with average hourly wages inching up by just 5.2% in the past 12 months.

With all this talk about inflation, we decided to dig into how Statistics Canada measures it, what's causing it and where we're headed from here. 

Let’s start with the basics. What is the CPI? When we talk about inflation, what we're actually talking about is the CPI, which reflects price changes. Statistics Canada calculates the CPI by tracking the prices of a basket of goods and services that reflects the overall annual consumption of a typical Canadian household. Think of it like Statistics Canada (if it were a person) out on a shopping trip and filling up a giant basket with services and goods from eight categories it thinks the average Canadian would purchase from. Just like the picnic basket you might take to a gathering, every category holds a different weight.  

So, what’s in the basket? In order of most- to least-weighted:

🏠 Shelter: Rent and mortgage costs, insurance, repairs and maintenance, taxes, utilities🍔 Food: Groceries and restaurant meals🚘 Transportation: Vehicles, gas, car insurance, repairs and maintenance, public transit costs🛋 Household expenses: Phones, internet, child care, cleaning supplies, furniture and appliances📚 Sports, travel, education and leisure🍹 Alcohol, tobacco products and recreational cannabis💊 Health and personal care: Prescriptions, dental care, haircuts, toiletries👚 Clothing, footwear and jewellery

In June, Statistics Canada announced that the weight of these eight components would change based on updated household data from 2021 to better reflect changing consumer behaviour. 

• For example, clothing is weighted more in the updated basket as more Canadians returned to in-person shopping in 2021.

In May, Statistics Canada also began factoring in the price change of used vehicles in its basket for the first time. The agency updates what's included in the basket according to changing consumer habits. For example, that's meant dropping products like anvils or DVD rentals (remember those?) from the list, while adding things like cannabis.

What (or who) is to blame for how expensive nearly everything is? There are lots of explanations for what is causing this massive spike in inflation. Here are the big ones: 

• Some economists say low interest rates over too long a period contributed to low mortgage rates that encouraged people to buy homes, which eventually overheated our housing market.

• Rising prices for commodities, like wheat, sunflower oil and corn, have only been worsened recently by Russia's invasion of Ukraine.

• Blame America? A recent paper from the U.S. Federal Reserve suggests that the U.S. government’s response to the pandemic might have adverse effects on Canadian households. With much more buying power than most countries, the U.S. often gets the first pick of limited supplies of goods in an attempt to meet large demand, partially caused by stimulus policies. This has left Canada (and much of the world) to compete for even more limited quantities, thereby driving up prices sharply. 

• Others suggest the public and private sectors have a role to play. The Government of Canada’s fiscal response to the pandemic put more money in people’s pockets and drove up consumption, but large job losses meant it was not sustainable. At the same time, companies may be inclined to increase their prices prematurely to get ahead of their rising costs.

The bottom line: A combination of one or more of these factors has led us to The Bad Place we're in now. But there's a glimmer of hope, as we saw a slower month-to-month increase in prices from May (1.4%) to June (0.7%). Sylvain Charlebois, a professor at Dalhousie University, also thinks food prices have hit their peak (big if true). 

— Sydney Piggott 

On our radar 

• Future Capital Partners, an edtech startup, teamed up with BDC Capital's Women in Technology Venture Fund to launch the second Women in Technology Series to support and train 150 women angel investors. The program, which aims to improve diversity in the venture industry, begins this summer. 

• Expanding on her successful Fenty Beauty line, Rihanna has filed a trademark for FENTY HAIR. According to the trademark filing, Rihanna’s hair line will include products such as hair clips, extensions, brushes and wigs. 

• Speaking of wigs, a group of four Black women — Isoken Igbinedion, Ifueko Igbinedion, Marlyse Reeves and Simone Kendle — are using artificial intelligence to upend the US$13 billion wig market. 

• Your parents may have taught you the importance of a strong credit score—lenders look at it before offering you a car loan, mortgage or even credit card. But how do you build credit…without a credit card? That’s what TomoCredit, founded by Kristy Kim, is out to solve. The San Francisco-based fintech, which helps newcomers, young adults and small- to medium-sized businesses build their credit, recently raised US$22 million.

TECH

TikTok upsets another tech giant 

No, this isn't a story about the viral (and concerning?) pink sauce. Since edging out YouTube for most average time spent on the app, TikTok has since dethroned Google as the most popular domain in 2021. And according to new internal data, Google is working on making changes to its products to appeal to younger users. 

What happened: Almost 40% of Gen Z prefers using TikTok and Instagram for search over Google, according to the tech giant's internal data. At a recent industry event, Google senior vice president Prabhakar Raghavan said younger users (aka Gen Z) are using TikTok, not Google Maps or Search, to find a lunch spot. 

• While Google has made strides to make Maps and Search more appealing to Gen Z (like searching with images and text at the same time or helping users orient themselves when figuring out directions), the platforms aren’t as relevant to younger users who are used to visual-based, short-form information (aka TikTok). 

Why it's a big deal: TikTok's explosion in popularity has come at the expense of bigger and more established tech companies, like Google and Meta. TikTok competitors Snapchat, YouTube and Meta's Instagram even introduced TikTok-like features to remain competitive. And recently, Meta rolled out changes to Facebook so that your feed looks and feels a lot more like TikTok. But you probably didn't even notice because who uses Facebook these days anyway? 

Zoom Out: Estimates show that TikTok is on track to make US$12 billion in ad dollars this year, triple the amount it made in 2021. As consumer interest leans towards video, especially short-form content, platforms will need to adapt to get people to stay on their platforms. 

— Sabrina Dotsch

Other things we read and we liked 

💬 For a while, it seemed like group texts were the social lifeline of the pandemic…until invites to IRL events and hangouts began to fill up our calendars again. But if there’s one group chat we want an invite to, it’s Amanda de Cadenet’s.

🍿 Gen Z loves TikTok (duh) and here’s a surprising one: subtitles.

😱 The trailer for Black Panther: Wakanda Forever is out and...wow.

🤔 We can keep a secret — but should we? 

💌 First comes love, then comes (sometimes) uncomfortable conversations about money.  Justin Barnuevo, a financial advisor, answers common questions couples have about things like joint accounts, handling differences in income and more. 

🗣 We’ve all been there: You have something urgent to say in a virtual meeting but you don’t want to interrupt your colleague. Do you raise your hand like you’re in school? But what if no one sees it? Go ahead and interrupt? Here’s how you can politely interject in an online meeting. 

🤝 Now hiring

Want to get a jump on finding your next role? Here are this week's featured job openings:

• Technical Sales Consultant at Candrone (Burnaby)

• Tech Lead Java at CIBC (Toronto)

• Marketing Specialist at dmg events (Calgary)

• Communications Specialist at ProSlide Technology (Ottawa)

MONEY CRUSH MONDAY

Making the leap from real estate to superfood lattes 

Today, Btchcoin is spotlighting Karen Danudjaja, the co-founder and CEO of Blume. You've likely seen Blume's pastel-coloured pouches at your local Anthropologie, Indigo, Whole Foods, or even on your Instagram feed. Founded in 2017 by Danudjaja (and Ella Dalling), the Vancouver-based company is remaking your favourite cafe lattes with the ✨magic✨ of superfoods. 

Her top tips for aspiring founders: 

• Take the step. The first step is the hardest, but just take one step in front of the other. And then every decision after that kind of happens in its own course.  

• Maintain relationships. I think there's this concept that businesses are cutthroat, and perhaps that's true in certain industries, but I've found that women founders just want to see others succeed and that it's actually a very supportive environment. 

On her favourite books, TV shows and podcasts: If I’m watching TV, it’s to unwind. Right now, I’m into The Wire, which is an older police crime show. For podcasts, I’m into Female Startup Club, The Female Founder’s Club and NPR’s How I Built This. And for a book, Good to Great: Why Some Companies Make the Leap…And Others Don’t by Graham King. 

On her WFH essentials: Lots of light, lots of water and a change of scenery, especially if I’m working from home. 

On her 6:30 am morning routine: After I wake up, I need to get into the right frame of mind to start working. To do that, I start with movement in the morning by walking my dog and making a coffee with one of our blends in it. I’m usually working by 7:30 am. 

Read the full Q&A with Danudjaja here to learn how she made the leap from commercial real estate to superfood lattes.