Canadian Survey of Consumer Expectations—Third Quarter of 2020

Labour market

Overall, consumers’ expectations around labour market conditions continued to be weaker than before the COVID‑19 outbreak. Consumers’ expectations for their wage growth over the next year remained below pre-pandemic level at 1.9 percent, while perceptions of wage growth over the past 12 months reached an all-time low of 1.1 percent (Chart 3).

Expectations for employment differed significantly by age group. For example, respondents between 18 and 24 years of age expect to return to a normal working schedule much later than those between 25 and 55 years. If these expectations are correct, younger workers could face the risk of longer-lasting economic damage (e.g., loss of work experience) from being out of the labour force for longer.

In contrast, consumers’ expectations for keeping or finding a new job improved modestly, consistent with the strong job recovery since the economy reopened in May and June (Chart 4). Despite a small improvement, the reported likelihood of voluntarily leaving a job remained much weaker than before the outbreak, suggesting that concerns about the health of the labour market are still elevated. If this results in less turnover, it could lower the quality of job-worker matching, leading to lower future productivity and wage growth.

News – Bank of Canada