Many Canadians are growing increasingly worried about job losses and an approaching recession, according to new Bank of Canada research.Blacklock's Reporter says the data suggests households are pulling back on spending amid economic uncertainty driven by trade tensions with the United States.“Consumers continued to see the labour market as soft,” said the Survey of Consumer Expectations: Second Quarter. The bank noted that “fears of job losses remain elevated,” especially among younger Canadians, who reported a higher-than-average risk of losing employment.The concern stems in part from ongoing trade disputes, which have caused households to rethink their spending. .“The trade conflict is leading consumers to become increasingly cautious about their spending plans and to change their spending behaviour,” the report said. Respondents indicated a growing preference to spend on Canadian-made goods.Household budgets for non-essential purchases — such as furniture, travel, and dining out — are being reduced, the report found. “Spending remains subdued” as most respondents anticipate a recession within the next year.“About two-thirds of consumers continue to expect the Canadian economy to fall into a recession over the next 12 months,” the report said. Many pointed to trade-related uncertainty as a major factor harming the economy..A separate Business Outlook Survey by the bank found similar anxiety among employers. “Sales outlooks remain pessimistic overall,” it said. “Most firms expect to maintain current staffing levels and limit spending to regular maintenance over the next 12 months.”Bank of Canada Governor Tiff Macklem has suggested more interest rate cuts could be on the way. Speaking to reporters in June, he said the economic picture remains fragile and additional rate reductions may be necessary if tariffs and uncertainty persist. “There is no question that uncertainty is bad for business,” Macklem said.“The longer these tariffs go on, the longer this uncertainty goes on, the more it is going to weigh on the Canadian economy,” he warned.The bank’s key interest rate currently stands at 2.75%, following seven straight cuts. The next rate announcement is scheduled for July 30.
