Alberta economists predict Canadian consumers will be 'cautious' with holiday spending
CTV
With Black Friday sales already in play and with Christmas a month away, the holiday shopping season is underway as Statistics Canada revealed last week the country's inflation rate climbed back up to two per cent in October. But even though the two-per-cent increase is in line with Bank of Canada targets, one Alberta-based economist says Canadians are "going to be very cautious," because while inflation has slowed down, prices haven't gone down.
With Black Friday sales already in play and with Christmas a month away, the holiday shopping season is underway as Statistics Canada revealed last week the country's inflation rate climbed back up to two per cent in October.
But even though the two-per-cent increase is in line with Bank of Canada targets, one Alberta-based economist says Canadians are "going to be very cautious," because while inflation has slowed down, prices haven't gone down.
"We do see them spending a little bit more than last year, but keep in mind that last year was a very difficult period with very high interest rates, before the Bank of Canada started lowering its interest rates and we had higher inflation, so it's not really a fair comparison to last year," Mark Parson, the chief economist for ATB, told CTV News Edmonton on Sunday.
"It could be better than last year, but people are still going to be going out bargain hunting, maybe buying a little bit less than normal because of some of these headwinds they're still facing, these higher interest rates and then coming off a period of high inflation."
While the two-per-cent inflation statistic is lower on average than it was a year ago, October's stat is up from 1.6 per cent in September as gasoline prices exerted less downward pressure on annual price growth.
The report from Statistics Canada on Tuesday says prices in October increased at a faster annual pace in five out of the eight major components of the consumer price index.
Chief to the challenge of affordability is wages. Moshe Lander, an Alberta-based economist with Montreal's Concordia University, told CTV News Edmonton last week that the wage of the average Canadian wages has been lagging behind the inflation rate for most of the last two years.
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