In a thought-leadership piece at RBC.com, economist Carrie Freestone highlights how Canadians aged 35-44 had a debt-to-disposable-income ratio of 250% in 2019 whereas for youthful millennials (beneath 35) it was 165%.
Each are nicely above the 150% of those that had been that age in 1999.
Whereas just one third of millennials have a mortgage, people who do might face 25% hikes of their funds at renewal early in 2024. With earnings having elevated however not sufficient to maintain up with rising debt burdens, this makes this group extremely susceptible within the occasion of job losses.
Freestone talks concerning the extra resilient place of child boomers who’re sometimes retired, much less impacted by charge rises, and fewer reliant on employment revenue as most of their revenue is from non-public pensions and authorities transfers.
However this technology has the bottom consumption so, whereas they could have the flexibility to keep up a lot of their spending in a recession, this could not sufficiently offset the decline in discretionary spending of youthful shoppers.