Recent survey shows Gen Z hit hardest by economic strains, driving Canada's financial confidence to new lows
Canadians are increasingly pessimistic about their personal finances, with Generation Z feeling particularly disheartened, as per a report from BNN Bloomberg.
The Nanos Pocketbook Index, which tracks perceptions of personal finances and job security, dropped to 50 last week, mirroring the low seen in April 2020. This figure is part of the broader Bloomberg Nanos Canadian Confidence Index that also assesses public expectations regarding the economy.
The decline in the pocketbook index is largely driven by young Canadians, specifically those aged 18 to 29, encompassing members of Gen Z and the youngest millennials.
For this group, the index plummeted to 40, marking the lowest point in its 16-year existence. This significant drop of 17 points in just five weeks surpasses the decline observed during the peak of the pandemic recession in April 2020 when Canada's GDP fell by 10.7 percent.
The sentiment about personal financial improvement is bleak across all age groups, with only 11 percent reporting better finances over the past year, the lowest percentage since the Bloomberg Nanos survey began in 2008. Half of the respondents indicated their finances have worsened.
Although Canada has technically sidestepped a recession, primarily due to substantial population growth fueled by immigration, the economic growth per capita has decreased. Since September 2022, the per-capita economic measurements have contracted by three percent.
The labour market shows clear signs of stress among young people, where job creation has not kept pace with the population increase. Youth unemployment has escalated approximately four times quicker than the rate for all age groups.
As of March, Canada's overall unemployment rate stood at 6.1 percent, an increase of 1.1 percentage points since December 2022. For those between 15 to 29 years old, the unemployment rate soared by 4.3 percentage points, reaching 10.9 percent.
These economic challenges are seen as a broader warning for Canada's economy. The financial strains deter many young couples from starting families, contributing to the country's low birth rate.
Moreover, the affordability crisis, particularly in the housing sector, has diminished support for Prime Minister Justin Trudeau among young people, with many now favoring the Conservative Party.
Despite efforts to regain their support with a youth-oriented budget in April, Trudeau's popularity continues to wane.
