Article content continued

“The pace of credit growth should pick up in the second half of this year,” as more “trend-like” household spending returns, Demers said. “This removes a lot of the downside risks regarding households we saw earlier this year.”

Consumer confidence highest in a year and a half

One more reason to believe big-ticket spending is set for a rebound is the recent surge in consumer confidence measures, which are closely tied to the state of the economy and moves in stock markets. The Bloomberg Nanos economic mood index reached 59.06 this month, the highest level in a year and a half. Periods of elevated consumer confidence tend to coincide with increases in home and vehicle sales.

The fear of missing out is also fuelling the nation’s debt habit.

40 per cent of respondents, mostly millennials, say they're spending more than they earn

A survey by Manulife Bank of Canada found almost 40 per cent of respondents, mostly millennials, say they’re spending more than they earn, and 12 per cent attribute the imbalance to an excess of costly outings with friends or family.

A lot of that has to do with the pressure of social media, according to Rick Lunny, the bank’s chief executive officer, who says especially for younger people who haven’t had time to build savings, the rising cost of housing and child care leaves little to spend on entertainment.

“Everybody’s on social media,” Lunny said by phone. “Everybody seems to have a better life than you. So you have this fear of missing out and you only live once attitude, but that’s a very expensive lifestyle when you can’t afford it.”

Bloomberg.com