Consumers may not be feeling as ‘rosy’ as the economy appears to be

Good news indicators on inflation, the job market and economy may be overshadowing the struggles faced by many consumers as data shows not all are ready to celebrate.

At first glance, the latest economic indicators appear to be good: GDP was up in September and the third quarter as economic output increased.

But average Canadians reduced their overall spending and say they are planning to spend even less during the holidays.

So how well is the economy actually doing right now?

“This is one of those cases where despite the the top line number looking pretty rosy, it’s actually a pretty difficult situation, and consumers are feeling it,” says Richard Forbes, principal economist at the Conference Board of Canada.

“Consumer confidence has been basically at historic lows all year, and that’s a reflection on how consumers are feeling about the overall economy and the job market and and those types of economic indicators.“

Statistics Canada reported Friday that gross domestic product (GDP) was up more than expected in September, allowing Canada to avoid a technical recession of two straight quarters of falling GDP despite the trade war and tariff uncertainty.

There was also good news for Canada’s job market with the unemployment rate falling slightly in October, and marked the first drop in three months. However, at around seven per cent, the unemployment rate is still the highest it’s been in about four years, and for youth, the unemployment rate is about double the national average.

But the Statistics Canada report also showed, on a per capita basis, household spending fell an average of 0.2 per cent from July through September, and a recent survey report from the Bank of Montreal shows 41 per cent of respondents plan on spending less during the holidays compared to last year.