Economic anxiety knows no borders, as Canadians and Americans share similar concerns about jobs and personal finance, according to the RBC Canadian Consumer Outlook (RBC CCO) and RBC U.S. Consumer Outlook Index (RBC COI).
Despite mixed news regarding both the job markets and economy, consumer confidence remains stable on both sides of the border, with 26% of Americans and 28% of Canadians believing that their economies will improve next year, the highest levels seen in over a year.
Canadian and American residents also share concerns about their personal financial situations, with only 26% of American consumers expecting their personal financial situation to improve, down 5% from February, while 34% of Canadians share that optimism.
“With both economies showing signs of a recovery, consumers need to focus on managing their money and developing a financial plan that includes saving and investing,” said Jason Round, head of financial planning support for RBC financial planning. “Sitting down with a financial planner to discuss your options is a good first step to preparing for unforeseen problems or changes.”
He adds, “Having an emergency fund and putting a manageable amount of money aside each pay period can really make a difference.”
When it comes to employment, worries are greater south of the border. However, only 26% of Americans expressed concerns about job loss, down from 32% in February.
In addition, 34% reported that someone in their family or a personal friend had lost their job due to economic conditions, the lowest level in over a year and down from 42% last month.
While Canadians are less anxious about their jobs, 21% said they remained concerned they might lose their job, unchanged since the beginning of the year.
RBC Economics forecasts that Canada’s GDP will increase by 2.6% in 2012, while U.S. GDP is expected to expand by 2.5%, bolstered by a rise in auto sales and growth in consumer spending.
“There is no doubt that recession has weighed on consumer sentiment on both sides of the border. However, there are burgeoning signs that the Canadian and U.S. economies are treading on a brighter path,” said Craig Wright, senior vice-president and chief economist of RBC.
He added, “A more robust year of broad-based growth is materializing in the U.S., which bodes well for economic growth in Canada. Our domestic economy will also be buoyed by the sustained low interest rate environment, solid balance sheets across corporate Canada, as well as elevated commodity prices in the year ahead.”
Other highlights from the surveys included a look at the major purchases of both Canadians and Americans, which include cars, household appliances and cars, and the discovery that 29% of Americans are uncomfortable with spending in the near future.
Rising gas prices are still a concern to both countries, with 88% Americans in particular believing gas prices will rise. While inflation pressure appears to be spilling into durable goods, it has not, however, affected food and grocery prices.