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Consumer Inflation Expectations Edge Lower Two Years Out And Beyond

CANADA DATA
  • Near-term consumer inflation expectations poked to new cycle highs in the Q4 consumer survey at 7.18% (from 7.11%).
  • Importantly though, longer-term measures moderated, slightly in the case of the 2Y-ahead (5.14 from the record 5.22 in Q3) and more meaningfully for the 5Y-ahead (3.1 from 3.44 and a recent high of 4 in Q2).
  • Further moderately dovish implications, at least for near-term demand, were found in the continued increase in the share of those reducing spending or making purchases later because of expected inflation and interest rates.
  • This was consistent with an experimental daily online survey of consumers trending to the lowest share expecting employment in the community to improve over the next six months since Mar’21 at 20%.
  • The main CSCE took place between Oct 27-Nov 17 with a follow-up in Nov and Dec 2022.


Source: Bank of Canada

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