April 25th, 2024

Firms, consumers more optimistic about economy amid expected rate cuts: BoC surveys

By The Canadian Press on April 1, 2024.

OTTAWA – The Bank of Canada says business and consumer sentiment improved during the first quarter of the year, despite higher interest rates still putting a drag on the economy.

The central bank released its business outlook and consumer expectations surveys today, which show increased optimism as people expect interest rate cuts are nearing.

Although firms still reported weak demand, indicators of business conditions, sales outlook and employment intentions improved after several quarters of decline.

Meanwhile, nearly two-thirds of Canadian consumers are cutting or postponing spending due to high inflation and interest rates.

However, the expectation of rate cuts is making consumers less pessimistic about the future of the economy and therefore fewer of them think they will need to continue to curb their spending.

Workers also continue to be optimistic about the job market and expect strong wage growth, despite signs of the labour market loosening.

This report by The Canadian Press was first published April 1, 2024.

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