The measure of consumer confidence in credit conditions is also below its historical average. Indeed, compared to usual, consumers expect:
- more difficult access to credit
- increased probability of debt default
- higher interest rates
Confidence in labor market conditions and the general economic environment is above average. Consumer confidence in the labor market is high: Canadians have a positive view of their own work situation and the economy as a whole.
Consumers expect to spend significantly more over the next 12 months (Chart 7). Growth in household spending will be supported by the extra savings that some Canadians have accumulated during the pandemic. As in the first quarter of 2022, consumers intend to spend around a quarter of their additional savings in 2022 and 2023.
However, the amount purchases may decrease. Canadians expect spending and prices to increase, but expect prices to increase further, which means fewer purchases made per dollar spent. A reduction in the quantity of purchases may be linked in part to weaker than normal consumer confidence, as people expect credit conditions to deteriorate and wage growth to not keep up with the inflation.