Confidence among Canadian consumers fell by the most since the depths of the pandemic, suggesting that the elevated sentiment that sparked Prime Minister Justin Trudeau’s bid for re-election may soon be fading.
The Bloomberg Nanos Canadian Confidence Index, which collects views from 250 respondents regarding their economic outlook, personal finance, and jobs security, declined 1.6 points to 62.6 for the week ending on August 27, marking the sharpest decline since April 2020.
The survey also showed that the proportion of Canadians expecting the economy to strengthen over the next six months fell from 54% at the beginning of July to 37% last week, while the share of respondents that said their finances have improved over the past year declined from 26% to 20% during the same period. Similarly, Canadians’ optimism regarding the booming real estate market has also faded, as approximately 51% revealed they foresee home prices to grow over the next six months; this is the lowest score for the question since February.
The decline in sentiment among Canadians could become troublesome for Trudeau heading into the September 20 election. Since the beginning of the year, households have remained relatively optimistic regarding the trajectory of the economy and the state of their personal finances. However, the latest CPI print for July showed that prices accelerated by the most in more than a decade, suggesting that the federal government’s generous stimulus spending has significantly eroded consumers’ purchasing power.
Information for this briefing was found via Nanos Research. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.