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Canadians are in a spending mood heading into summer. What that means for inflation - globalnews.ca - Canada
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Canadians are in a spending mood heading into summer. What that means for inflation
pandemic started that travel restrictions have dropped and the world feels like it’s opening up again.So when it comes time to check out and the plane tickets are twice as expensive as you had budgeted, do you cancel the plans?Or do you just say whatever and click buy?For Canadians weighing decades-high inflation with pent-up demand for travel and other experiences after years of pandemic lockdowns, the answer seems to be landing on “buy now.” Searing hot inflation could shift Canada Day BBQs to ‘hotdogs instead of steaks’ But a surge in demand for consumer spending could make efforts to bring rampant inflation back into line even more of an uphill battle, experts say.TD Economics put out a report this week tracking spending data leading into the busy summer months.Real spending was up 15 per cent year-over-year in May, with TD suggesting that surging prices — inflation hit a nearly 40-year high of 7.7 per cent that month — had yet to take a bite out of consumer demand.TD said that spending has shifted from an appetite for goods, as Canadians sought to buy stuff for their homes during lockdown, to services, now that the weather is warming and their favourite experiences are opening back up.Demand for recreation and entertainment is leading the charge, with spending in this category 40 per cent higher (on a nominal basis, meaning not adjusted for inflation) compared with pre-pandemic levels.TD senior economist Leslie Preston, one of the report’s authors, tells Global News that after years of being denied the chance to go out and spend their money, the next few months will likely see Canadians keen to “scratch that itch.”“I do think there’s a lot of pent-up demand,” she says.“People made a lot of sacrifices for the two
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