Goods Spending Driving Consumption Recovery: Canada’s Two-Year Household Consumption Outlook

The Conference Board of Canada, 13 pages, October 26, 2020
Issue Briefing
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This quarterly economic forecast presents the medium-term outlook for the Canadian economy. This release focuses on household consumption. For an overview of all major components of the economy, go to the Canadian Outlook main page.

Document Highlights

  • Household spending is expected to rebound 7.2 per cent in the third quarter of 2020, following its record 13.1 per cent decline in the second quarter.
  • Retail sales had fully recovered by July, reflecting the rapid recovery in spending on household goods over the summer. Pent-up consumer demand also pushed up vehicle sales.
  • The recovery in spending on services will be slow and will depend largely on the evolution of the COVID-19 pandemic, both domestically and globally. We expect total real household spending to return to its pre-pandemic levels by the first quarter of 2022.
  • Massive government income support programs significantly boosted household income in the second quarter, contributing to the strong growth of spending over the summer. But as income support starts to wind down, the pace of consumption growth will slow as well.

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