‘Tis the time for massive volumes of numbers detailing the particulars of consumers’ responses to gift buying. This year, that also incorporates uncertainty, inflation, and supply chain issues. So far, the results aren’t crushing by any means for retailers and the overall economy (which, let’s remember, is about 68% consumer spending). But they’re not that exciting, either.
A warning: the data is provided by companies that offer systems and information for retail supply chain or marketing management. Figure that colors the presentations and assumptions.
First up, Sensormatic Solutions, part of Johnson Controls
JCI
, which itself is big in technologies for buildings, energy, retail, and some other sectors. Its preliminary data on in-store shopping on Black Friday suggested a 47.5% increase over 2020, which sounds good until you remember that during a tough time in the pandemic, many people weren’t all that excited about being in crowds.
Sensormatic also has data comparing 2021 to 2019, the previous “normal” year. Shopper visits were down 28.3% from then. Visits to stores on Thanksgiving Day were down 90.4% from 2019. Which doesn’t seem necessarily a bad thing. But, even if no one in the business is saying, this is likely freaking out many in retail who have been looking to regular patterns for the holidays.
Adobe
ADBE
tracks online shopping and had expected spending on Thanksgiving Day to be between $5.1 billion and $5.4 billion, with the final coming in at the low end. Similarly, Black Friday, during which people spent $8.9 billion, was also at the low end of the predicted range and, interestingly, slightly lower than in 2020.
Both numbers are well up over 2019, with Black Friday hitting $7.4 billion and Thanksgiving Day, $4.2 billion.
A couple of possibilities speak to both the economy and many, though clearly not all, consumers worried about being in crowds, especially with news of the Covid omicron variant. An obvious one is to factor inflation into the analysis.
Costs have been rising, so is there any wonder that results might come in on the low side of estimates, especially when the practice of forecasting is to create an informational circus that the more comfortable can chew over? Using dollars as the measure, the numbers now mean smaller amounts of consumption than once might have happened. With the official measure of inflation, the consumer price index, running 6.9% since October 2020, maybe the number is more analogous to $5.1 billion less than 6.9%, or $4.74 billion. Then add another 1.2% of inflation in 2020, so a total now of 8.1%. That makes the $5.1 billion more like $4.68 billion, so much closer to 2019, with much of the growth due to inflation and not organic expansion.
Another possibility is that many people are still hurting financially from the pandemic crash. The worlds of finance and media often focus on medians or averages. If they seem to be in acceptable shape, then the prognosis is a strong economy.
Except, averages are usually top weighted, meaning that the fortunes of the financially fortunate at the apex of the socioeconomic mountain are so large that they pull the results up. Describe the economy by the average and you almost always automatically put lipstick on a rogue swine. Use the median instead and too easily people forget that half of the population does worse and half better.
Statistics can be powerful and useful, but still limited if people don’t pay attention to the distribution—the picture of how fortune, and the machinations of humankind, allot outcomes, good and not, among everyone.
Millions struggle with meeting rents that rise far faster than their incomes. At the end of September, consumers paid 10.5% more than the year before to obtain meat, poultry, fish, and eggs. It is expensive to just live for a large portion of the country.
Tracking of spending at the holidays ignores that issue. Granted, business affects jobs which have an impact on everyone. But public fascination is another distraction from what a broader view of the economy would provide. And that says quite a bit about where we are, fiscally and morally.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
