Consumer fatigue an ominous sign for economy - The Globe and Mail - 1 views
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Consumers typically account for 60 per cent of the country’s gross domestic product, and rising living costs along with elevated debt levels suggest they won’t be much help this year
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Gross domestic product expanded at an annualized 3.9 per cent in the first quarter, the fastest pace in a year, led by business investment and manufacturing, Statistics Canada said
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that pace will be cut by almost half in the second quarter, while Finance Minister Jim Flaherty told reporters Monday he’s anticipating “more modest” growth in the rest of the year
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In the near term, households are under pressure as rising food and energy costs cut into their budgets
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“I will never, never do that again. I want to have the money up front before I buy something, because I don’t want to get into that trouble again,” said Ms. Thornton
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the household debt service ratio – debt payments to disposable income – jumped to a three-year high of 7.8 per cent from 7.2 per cent
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Kim Thornton, for example, is one fatigued consumer. The mother of four says her family ran up about $50,000 in debt in prior years on credit card spending
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Canadians are getting the message about whittling down debt, and that is translating into fewer purchases of discretionary goods
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reduced hours and leaner wages – a legacy from the recession – mean many families have less money with which to service their debt, he added