Snowed Under: Falling inflation provides scant relief as Canadians cool holiday spending for a second year

Contributed

The holiday shopping season may be underway, but the Grinch of inflation continues to dampen holiday cheer.

New data from the non-profit Angus Reid Institute finds Canadians finding little reprieve from a stabilizing inflation situation.

Underscoring how economic conditions continue to drag, the sting of a second year of high consumer prices affecting everything from the cost of vitamins to bread and rent has majorities saying they will spend less on holiday preparations this year (55%) and have cut back on discretionary spending overall in recent months (61%). This continues a trend that emerged last year, when similar numbers said they had cut back.

For seven quarters in a row, more than two-in-five Canadians report feeling left behind as the cost of living rises. Currently, 46 per cent feel they aren’t keeping up financially, nearly quadruple the number who say they are getting ahead (12%). Since the summer, a majority of Canadians have reported they find it difficult to feed their family as prices at the grocery store continue to rise faster than other elements of Statistics Canada’s Consumer Price Index.

The Bank of Canada may be relieved by the recent deceleration of inflation as it considers its next policy rate decision in early December, but Canadians appear more discouraged than not as they look ahead to 2024. Two-in-five (40%) expect to end next year in a similar financial position, while one-third (33%) see their circumstances worsening. Fewer than one-in-five (18%) express optimism that the next 12 months will brighten their financial picture. More Key Findings:

• Cost of living stays ahead of the pack of other issues in the eyes of Canadians. Three-in-five (61%) select it as the top issue facing the country, ahead of health care (46%), housing affordability (32%), climate change (24%) and the economy more broadly (21%).

• Three-in-ten (31%) Canadians are found to be Struggling by ARI’s Economic Stress Index. One-quarter (25%) are Uncomfortable, while equal sized groups are Comfortable (22%) and Thriving (22%).

• Approaching four-infive (78%) of the Struggling are spending less on holiday preparations this year, outnumbering the Uncomfortable (64%), Comfortable (47%) and Thriving (20%) who say the same.