- The Index of Consumer Confidence ticked up 3.2 points in October to 113.2 (2014=100) following two consecutive months of decline. The index now sits at 6 per cent below its pre-pandemic level. The increase was seen across Canada, except in the Atlantic provinces.
- The share of consumers with pessimistic views of future job prospects dropped to a record low of 14.5 per cent this month. Canadians are finally starting to feel more confident about future job prospects following three consecutive months of decline.
- However, the share of positive sentiments regarding current finances, dipped to 13.0 per cent, a seven-month low. Optimism on future finances also stalled this month.
- Given consumers’ concerns over future finances, the sentiment on major purchases did not advance much. Around 51 per cent of survey respondents believed that now is a bad time to make a major purchase, much higher than the pre-pandemic average of 38 per cent.
- Consumer confidence among people aged between 45 and 70 continues to outperform the younger generation which was still sitting at more than 10 per cent below their pre-COVID level.
Key insights:
- As new COVID-19 cases dropped, consumer confidence picked up. The improvement in October’s Consumer Confidence Index mainly reflects the uptick in consumers’ confidence in future employment, as more job openings are expected following the economic reopening.
- Still, not all is well. Soaring inflation is weighing on consumer confidence as it continues to erode households’ purchasing power. Besides, without a clear timeline on when inflation will cool down, optimism about future finances is expected to deteriorate over the coming months. Elevated prices are likely to force consumers to withhold from spending on large-ticket items and wait until prices drop.
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