The Big Story Is our economy fluctuating because of "vibes"?
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Dec 2, 2024 Nik Nanos, Chief Data Scientist at Nanos Research, dives into the intriguing concept of a "vibecession"—a term coined by Finance Minister Chrystia Freeland to describe fluctuating economic sentiments. He discusses how the recent U.S. elections impact consumer confidence in Canada, revealing a disconnect between economic indicators and public perception. Nik also sheds light on the psychological effects of economic rhetoric, the uncertainty caused by potential U.S. tariffs, and the importance of negotiation in alleviating trade tensions.
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US Election Impact
- Donald Trump's election victory has negatively impacted Canadian consumer confidence.
- The U.S. election's effect is psychological, creating a "chill effect" on the economy.
Self-Fulfilling Prophecy
- Negative psychology can become a self-fulfilling prophecy, impacting consumer behavior.
- People delay purchases due to economic uncertainty, like rising interest rates or job insecurity.
Vibecession
- Finance Minister Freeland calls it a "vibecession" as people feel uneasy despite improving economic indicators.
- This "vibecession" can deter investments from American firms due to perceived risks.