Expected real interest rates are subjective expectations of “what interest rates in real terms will be when future price changes are taken into account,” and will have various influences on people’s savings and investment behavior as well as asset prices.
Moreover, wages—which could be seen as a barometer of overall labour market conditions—are picking up further. Overall, the data suggest that the labour market is continuing to tighten. Revised historical data also indicate higher disposable incomes and more saving among Canadian households than previously reported. Overall, recent information augurs well for households’ financial situations and their future spending, although consumer confidence has been softening.