Consumers perceive a slowdown in inflation, yet their short-term inflation expectations remain mostly unchanged. This perception is tied to their own experiences with price fluctuations in essentials like food and fuel. Long-term inflation expectations have risen but are still below historical averages. Concerns persist about high inflation, driven by factors like increased government spending and soaring housing costs, expected to take longer to resolve.
Canadians are feeling the strain of high inflation and interest rates on their finances, leading many to cut back on spending. Despite this, consumer sentiment improved slightly this quarter, driven by expectations of lower interest rates. This optimism translates to a less pessimistic outlook on the economy and personal finances, reducing the perceived need for further spending cuts.
The labor market sentiment has stabilized, with workers maintaining a positive outlook and anticipating robust wage growth amidst ongoing high inflation.
Source: https://www.bankofcanada.ca/2024/04/canadian-survey-of-consumer-expectations-first-quarter-of-2024
