According to a recent Equifax report, consumer financial health is deteriorating amid economic challenges, with 1.4 million Canadians missing credit payments in the first quarter. This situation is linked to high living costs, unemployment, and reluctance to spend. Notably, consumer delinquency rates for non-mortgage holders rose significantly, especially among younger people. This shift is expected to impact businesses and employment levels as spending decreases, emphasizing the interconnected nature of economic conditions affecting credit obligations and consumer behavior.
In order for anybody to kind of keep making the payments, you need to have an income, you need to have good employment. When there's economic uncertainty, that does create a few impacts.
We actually think this is more to do with pulling back on that discretionary spend. And that is going to have a knock-on impact to business and that ultimately will have a knock-on impact to employment levels.
If you have got credit commitments and your day-to-day living costs go up or it's harder to get employment, or maybe your incomes haven't risen at the same amount as the cost of living, then it's just harder to keep making the payments that you've committed to.
Consumer-level delinquency rates among non-mortgage holders rose 8.9 percent year over year, compared to 6.5 percent for mortgage holders.
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