Canada's household debt reaches 174.6% of gross income, making it more sensitive to interest rates than the U.S.

By Free Republic | Created at 2024-10-27 17:24:11 | Updated at 2024-10-27 19:32:25 2 hours ago

Canada's household debt reaches 174.6% of gross income, making it more sensitive to interest rates than the U.S.
Citizen Watch Report ^

Posted on 10/27/2024 10:15:48 AM PDT by davikkm

The Canadian economy faces a looming crisis, heavily influenced by staggering household debt levels. As of 2024, Canadian household debt stands at a staggering 174.6% of gross income, significantly higher than the 75% of GDP in the U.S. This means that Canadians are dedicating a far greater portion of their after-tax income to servicing their debts, raising urgent concerns about financial stability.

The implications are profound. With higher household leverage, Canada is exceptionally sensitive to changes in interest rates. When rates increase, Canadian households grapple with soaring debt servicing costs, which eat into disposable income and curtail consumer spending. This cycle can stifle economic growth, posing a significant threat to the nation's financial health.

In contrast, the U.S. economy has shown resilience, becoming less susceptible to interest rate fluctuations over the past few decades. As of now, interest rate changes exert a muted effect on employment and overall economic activity in the U.S. However, Canada’s scenario starkly differs, with the total household debt climbing to $2.98 trillion by August 2024, predominantly driven by mortgage debt.

(Excerpt) Read more at citizenwatchreport.com ...

TOPICS: Business/Economy
KEYWORDS: blogpimp; canada

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1 posted on 10/27/2024 10:15:48 AM PDT by davikkm

To: davikkm

Idiots who voted for Trudorp all these years will get everything they deserve.

2 posted on 10/27/2024 10:16:51 AM PDT by dfwgator (Endut! Hoch Hech!)

To: davikkm

This sort of insanity is especially rampant in the GTA. And guess who they overwhelmingly voted for?

3 posted on 10/27/2024 10:17:18 AM PDT by OttawaFreeper ("The Gardens was founded by men-sportsmen-who fought for their country" Conn Smythe, 1966 )

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