The Summer of Our Discontent: Canada’s Two-Year Household Consumption Outlook

The Conference Board of Canada, 15 pages, August 9, 2022
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

  • Real household consumption will grow by 4.7 per cent in 2022 and 3.0 per cent in 2023. We expect that household spending will also keep gradually shifting toward services and away from goods.
  • Inflation has been above the Bank of Canada’s target range of 1 to 3 per cent since April 2021. Consumer Price Index (CPI) inflation will average 6.6 per cent this year and 3.3 per cent in 2023. It will fall below 3.0 per cent in the third quarter of 2023.
  • Despite price growth, spending on leisure and travel-related consumption will rise this year as it continues to climb out of its trough.
  • The pandemic has lost much of its sway over consumer decision-making. Restrictions have generally lifted, and most households have learned to live with COVID-19. The state of the economy is replacing the pandemic as the source of consumer concerns.
  • Interest rates are swiftly rising, and higher borrowing costs will discourage household spending. Consumption of durable goods and housing, which are often purchased using credit, will be impacted more than spending on essentials.

Table of Contents

Key Findings
Household Consumption Snapshot
Even at These Prices, Consumers Will Spend More on Services
Exuberance for Goods Will Ease
Household Finances

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