Posted 11/30/2023, 10:00:00 AM
Plunging Consumer Confidence Signals Pullback in Spending, Testing Bank of Canada Policy
- Consumer confidence in Canada has plunged to near record lows, suggesting consumer spending could weaken further
- Current economic conditions are not as bad as previous recessions, but feel that way to many Canadians
- Low confidence indicates consumers plan to reduce spending due to high inflation and interest rates
- This pullback in spending may cause the Bank of Canada to rethink its interest rate policy
- Once diminished, consumer "animal spirits" can be very difficult to restore, hampering economic recovery