RBC: Canadian slightly more pessimistic on employment anxiety

02-02-2010 12:57

Canadian consumers have become slightly more pessimistic in January regarding employment and the economy, as they have become more worried about their debt loads, according to today’s consumer survey. The Royal Bank of Canada (RBC) Monthly Canadian Consumer Outlook Index dropped two points to 106 in January from December.

Canadian economy

The sentiment regarding the economy has become negative, with 52% viewing it as bad and 48% viewing it as good in January. In the previous month, 51% described it as good and 49% described it as bad.
In addition, 56% of the Canadian population forecasts that the economy will recover in 2010, while in December 60% was positive about the economy. Royal Bank of Canada believes that the increasing number of Canadians planning to postpone important purchases like devices, vacations and cars, is mainly the result of the present economic situation. The percentage of Canadians who forecast that the economy will deteriorate didn’t change at 17%.

Job anxiety

Last week’s figures demonstrated that the Canadian economic improvement accelerated in November and better than forecasted economic expansion boosted expectations of a strong last quarter. This week’s data should demonstrate another recovery.
Slightly more than 26%, or 1 in 4 Canadians, declare that a member of their household is concerned about their job situation, while in December job anxiety was 21%. In every Canadian province job worries increased.

Debt level

Almost 60% of respondents expressed concerns about their debt level, while respondents older than 55 were less concerned, probably since their debt load is less extensive.

Royal Bank of Canada

Several weeks ago, the Royal Bank of Canada warned of rising household debts. Bank of Canada governor Mark Carney has been urging Canadians to control their personal finances to be able to pay for their debts in ‘ordinary times’ when the Bank of Canada increases interest rates again.

Interest rates

Canadian rates have been at the lowest levels since April and the Royal Bank of Canada has stated that they will maintain the current rates until the end of June, as long as inflation remains a threat. The Royal Bank of Canada index is based on an internet survey among 1.014 Canadians, ages 18 and older, executed between January 8 and January 14.