Consumers Still in a Rut as Soft Economy Adds to Trudeau’s Woes
(Bloomberg) -- The bad news just keeps coming for Canadian Prime Minister Justin Trudeau.
Confidence among consumers remains sluggish -- well below the 12-month average on widespread expectations the economy will stagnate or weaken, telephone polling shows. Canadians are more confident in their job security than they have been in years, but that hasn’t extended into better personal finances or optimism about the housing market.
Trudeau is in an election year and Canada’s economy is stumbling, as data released Friday showed that gross domestic product essentially stalled last quarter. That could give Bank of Canada Governor Stephen Poloz more reason to pause interest rate increases, with his next decision on Wednesday.
The Canadian prime minister is already dealing with a controversy over whether he tried to end a court case against SNC-Lavalin Group Inc. to prevent job losses -- a saga that has already cost him a cabinet minister and his principal secretary. The economy, stuck in neutral, presents another risk that would be exacerbated if there was any further slowdown.
“Under normal circumstances, it would feed grumpiness. In the current environment, any kind of downturn would be even more of a problem for the Liberals,” pollster Nik Nanos said.
The Bloomberg Nanos Canadian Confidence Index rose slightly to 55 to begin the month, from 54.2 a month earlier. It remains below the 12-month average of 55.9, and hasn’t topped that level since November. Just 13.9 percent of Canadians expect the economy to strengthen in the next six months, versus 32.9 percent who expect it to weaken.
The data is sluggish despite strong employment indicators -- mirroring a trend nationally where Canadian jobs figures have been regularly more robust than other data. The polling shows the share of Canadians who say their job is at least somewhat secure was 72.8 percent, the highest recorded level since 2011, up from 64.3 percent a month earlier.
Still, just 18.3 percent of Canadians say their personal finances are better off than a year earlier, down from 18.9 percent who said so last month, the polling found.
Housing optimism has also deteriorated -- the share of respondents who expect local real estate values to decrease in the next six months rose to 19.6 percent, from 16.3 percent a month earlier, though that cohort remains outnumbered by those expecting price increases -- 37.1 percent of respondents, little changed from a month earlier.
The weekly index is based on a four-week rolling average of a total of 1,000 respondents contacted by phone. It’s considered accurate within 3.1 percentage points, 19 times out of 20. The latest polling concluded on March 1.
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