2024
8
Canadian Consumers and the Economic Outlook 2024
2024-02-27T16:04:54+00:00
REP69D1B991_8047_477C_BFAC_257F0CBF000F
4995
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Rising interest rates have been felt by consumers, forcing cutbacks in spend and a focus on debt. Optimistic outlooks persist, sustaining hope for growth in 2024. Patrick Rahlfs, Senior…
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  8. Canadian Consumers and the Economic Outlook 2024

Canadian Consumers and the Economic Outlook 2024

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Rising interest rates have been felt by consumers, forcing cutbacks in spend and a focus on debt. Optimistic outlooks persist, sustaining hope for growth in 2024.

Patrick Rahlfs, Senior Research Analyst

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  1. EXECUTIVE SUMMARY

    • What you need to know
    • Consumer trends: key takeaways
    • Moderate changes are common as consumers feel the pinch
    • Graph 1: changes in managing finances due to inflation, 2023
    • Consumers tighten their belts, but remain optimistic about the near-term future
    • Graph 2: financial outlook for next 12 months, 2023
    • 35-54 year olds juggle leisure and loans
    • Graph 3: use of extra money to pay off debt, by age, 2023
    • Opportunities
    • Act upon young consumers' investment ambitions
    • Questrade seeks to make investing less complicated
    • Combined accounts can address new Canadians' goals
    • National Bank of Canada offers newcomer-specific benefits
  2. Consumer Insights

    • Effects of inflation on finances
    • 60% of consumers have made at least moderate changes due to inflation
    • Graph 4: changes in managing finances due to inflation, 2023
    • Lower-income segments have been most affected by inflation
    • Graph 5: changes in managing finances due to inflation, by household income, 2023
    • Major changes due to inflation peaked among 25-34 year olds
    • Graph 6: changes in managing finances due to inflation, by age, 2023
    • Most new Canadians made at least moderate changes due to inflation
    • Graph 7: changes in managing finances due to inflation, by new Canadians, 2023
    • More than 50% of South Asian consumers have made moderate changes due to inflation
    • Graph 8: changes in managing finances due to inflation, by race, 2023
    • Spending behaviors
    • Consumers hope to have finished cutting back on spending, look to invest more
    • Graph 9: savings and spending behaviors and plans, 2023
    • Travel plans may shift from domestic to international
    • Graph 10: travel and large purchase behaviors and plans, 2023
    • Young consumers have the most desire to increase investments
    • Graph 11: putting more money into investments, by age, 2023
    • While plans to invest are unanimous, ability to invest differs by income
    • Graph 12: putting more money into investments, by household income, 2023
    • 35-54 year olds have cut back on spend, but hope to be done
    • Graph 13: cutting back on my overall spending, by age, 2023
    • New Canadians look to save and invest
    • Graph 14: plans to add more to savings and investments, by new Canadians, 2023
    • Debt reduction remains a key focus for struggling consumers
    • Graph 15: reducing non-mortgage debts, by financial situation, 2023
    • Use of extra money
    • Saving is the distinct top priority for extra money
    • Graph 16: use of extra money, 2023
    • Young consumers turn to gifts and entertainment, while dining and travel skew older
    • Graph 17: use of extra money, by age, 2023
    • Debt is a key focus for 35-54 year olds
    • Graph 18: use of extra money to pay off debt, by age, 2023
    • Higher earners balance debt with other necessities
    • Travel and investment are heavily income-dependent
    • Graph 19: use of extra money toward travel and investments, by household income, 2023
    • Past and future financial outlook
    • More consumers are worse-off compared to last year
    • Graph 20: financial situation now vs a year ago, 2023
    • Nearly half of 45-54 year olds are worse-off
    • Graph 21: financial situation now vs a year ago, by age, 2023
    • Inflation concern waned toward the end of 2023
    • Graph 22: rising prices as top-three concern for next 6 months, 2022-23
    • The most common inflation-impacted categories are normalizing
    • Graph 23: effects of inflation, 2023
    • Younger consumers are the most optimistic
    • Graph 24: financial outlook for next 12 months, by age, 2023
  3. State of the economy

    • The Canadian economy contracted in Q3 2023
    • Graph 25: quarterly real GDP growth, 2021-23
    • Policy rate sits at 5% heading into 2024
    • Graph 26: policy interest rate, by month, 2020-24
    • Inflation has subsided, but remains over 3%
    • Graph 27: CPI change over last 12 months, 2020-23
    • Credit card interest rates have risen, reflecting policy rates
    • Graph 28: average purchase regular APR in credit card acquisition direct mail, 2020-23
    • Low rates on intro periods will be valued in 2024
    • Unemployment ticked up toward the end of 2023
    • Graph 29: unemployment rate, 2020-23
  4. Appendix

    • Consumer Research Methodology
    • Generations
    • Abbrevations and terms

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