What is driving price increases?

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Fears surrounding inflation continue to grow as prices rise for goods and services across the board. While in the car driving with the rest of the country this weekend, I listened to a podcast on the issue that focused on what was driving those fears. In a nutshell, the editors attributed it to businesses struggling to find workers and an uptick in demand for certain goods (think used cars) that could become a self-fulfilling prophecy as expectations of higher prices push workers to ask for higher wages and businesses subsequently raise prices.?

While these components make sense and are certainly playing a role, I believe there are other factors at play. Businesses are raising prices — a survey in Canada shows owners there expect to raise prices by an average of 3.3% this year — but it's not only because workers are asking for more money.

There are myriad reasons behind this trend. Businesses have been largely shuttered over the past year or operating at limited capacity. They have to bring in revenue and fast to both stay afloat and pay their workers. The glut in applicants is creating higher demand that is driving up wages. And supply chains continue to be a mangled disaster in many parts of the world, causing prices for lumber and other commodities to skyrocket . It will take time for supply chains to be sorted out and small businesses in particular at the mercy of suppliers until then.

Is your business raising prices? If so, what’s driving that decision? What factors do you think are causing prices to go up?

Latest Developments

• Canadian Prime Minister Justin Trudeau announced a new government loan program specifically for Black entrepreneurs.?
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• Open carry laws took a backseat to boredom and a need to get out of the house over the past year with restaurants and bars offering cocktails to-go. That trend is unlikely to fade now that life is going back to normal.

Conversations For You

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Something Good

• As this teenager said, “Don’t push bears.” That being said, I doubt this bear will go after her dogs again.