A recent survey conducted by Bloomberg Nanos revealed that Canadian consumer confidence has reached its highest level since May 2022. According to the survey, sentiment is still below historical averages, but more people are feeling optimistic about economic growth and their financial resources.

While some pessimism remains, expectations should continue to grow brighter as the Bank of Canada continues to lower interest rates and real estate prices recover.

Research has shown a connection between consumer feelings about the economy and how much they spend. This means that consumer confidence levels can actually help drive economic growth because 60% of Canadian GDP is driven by consumer spending.

It is an example of the mood-based nature of the economy. If enough people expect prices to rise, for example, it can become a self-fulfilling prophecy to some extent.

Consumer sentiment does not always align with economic performance. Just look at the United States, where most Americans believe GDP is contracting despite its rapid growth.