Household Spending Sees Improvements Since Last Month
Index of Consumer Spending
The Index of Consumer Spending (ICS) averaged 87.9 points in July, a 1.4-point increase from last month (the week of April 10, 2022 = 100).
- The index was at 86.5 in the week of June 25. Through the week of July 2, the index presented an upward trajectory, rising from 86.5 to 89.7, an increase of 3.2 points. The subsequent weeks have reversed this trend however. In the week of July 9, the index declined by 1.4 points to 88.3. Then, in the final week recorded (July 16), the index adjusted once more, settling at 87.0 from its previous value of 88.3.
- The ICS averages saw largely positive changes with almost all regions improving their index scores from last month. The Atlantic region experienced the largest gain among the regions with an increase of 4.0 points. Quebec was close behind with an increase of 3.8 points. Following these leaders, British Columbia added 1.7 points, the Territories 1.5 points, Alberta 1.1 points, and finally, Ontario added 0.5 points. The only region to experience a decline was Manitoba–Saskatchewan, which saw a decrease of 1.3 points from last month.
- Nationally, the monthly average current volume improved slightly to 116.8 from 116.5, marking 7 months of continued month-to-month growth.
- Five regions saw improvements in their month-to-month average current volume: the Atlantic provinces, Quebec, British Columbia, Alberta, and the Territories. Of these, the Atlantic provinces had the most significant rise in nominal spending—8.9 points—when compared with last month. Analyzing the regions where the average current volume dropped, Manitoba–Saskatchewan experienced the most significant loss with a decline of 7.6 points.
- Coinciding with the ICS’s increase was growth in consumer confidence. The Index of Consumer Confidence (ICC) showed a notable rise of 5.5 points at the national level when compared with the prior month.
Alberta
The index averaged 92.9 points, up from 91.8.
Beginning with June 25’s score of 92.2, the index climbed markedly, advancing to 95.6 during the week of July 2. Subsequently, during the week of July 9, the index fell back slightly to 93.4, a decrease of 2.2 points. Moving forward to the week of July 16, the index continued downward to 90.4, a further decrease of 3.0 points. Despite the retreat of the ICS in the final weeks, on average the province saw a monthly increase of 1.1 points in its ICS score. Alberta also experienced some moderation in consumer confidence in July with an increase in the number of outlooks expecting current and future finances as well as jobs to stay the same.
Atlantic region
The index averaged 99.7 points, up from 95.7.
In the final week of June—June 25—the index reached 97.8. The index in the following week, July 2, moved upward, rising from 97.8 to 102.2, an increase of 4.4 points. However, in the subsequent week of July 9, the index shifted down to 100.2, a decrease of 2.0 points. Continuing to the week of July 16, the index declined further to 98.8, a drop of 1.4 points. The Atlantic region experienced the most significant increase in its ICS score in July, as it rose an average of 4.0 points. This resulted from a lower level of pessimism and a move toward moderation regarding job prospects in the region as less people expected there to be fewer jobs available in the future. Further, the region was more optimistic regarding consumers’ future finances. Combined, these improvements likely provided a greater sense of financial stability for consumers, enabling them to pursue more discretionary spending.
British Columbia
The index averaged 89.9 points, up from 88.2.
Starting with the week of June 25 and continuing through the week of July 2, the index rose from 88.1 to 92.1—a bump of 4.0 points. However, during the week of July 9, the index eased to 91.0, a drop of 1.1 points. In the final week recorded, July 16, the index fell further by 2.7 points, dropping down from 91.0 to 88.3. In July, British Columbia consumers saw improvements in their current and future financial outlooks, as well as their future job prospects.
Ontario
The index averaged 80.3 points, up from 79.8.
Starting from June 25’s score of 78.5, the index took a positive turn in the week of July 2, rising to 82.2, a gain of 3.7 points. Moving on to the week of July 9, the index dipped slightly, sliding down to 80.8. In the subsequent week of July 16, the index continued its downward trend, landing at 79.6, a further drop of 1.2 points. Ontario also experienced a slight decrease in unemployment in July, as it fell 0.8 per cent from the month before. This movement translated into heightened job confidence with more Ontarians believing they will have better job prospects in the coming months, as indicated by our ICC.
Quebec
The index averaged 89.8 points, up from 86.0.
Beginning with June 25’s score of 88.3, the week of July 2 displayed an upward trend, going from 88.3 to 90.2, a rise of 1.9 points. In the following week, that of July 9, the index declined slightly, edging down to 89.6. However, during the week of July 16, the index rebounded, climbing 1.4 points to 91.0. A partial explanation for this positive movement was a notable increase in the number of part-time employment in the region, which outpaced increases in unemployment. Compared with last month, part-time employment rose 3.4 per cent; in contrast, unemployment rose only 2.6 per cent. However, Quebec’s unemployment remains elevated, sitting more than 10.0 per cent higher than it was at the same time last year.
Saskatchewan–Manitoba
The index averaged 102.7 points, down from 103.9.
Starting with the week of June 25 and extending to the week of July 2, the index had positive momentum, increasing from 103.7 to 105.0, a rise of 1.3 points. In the week of July 9, the index experienced a minor setback, falling to 102.1. In the final week of July 16, the index continued its downward movement, dropping further to 99.8 from 102.1, another decrease of 2.3 points. In July, both provinces saw substantial increases in the number of unemployed with Manitoba’s the most notable as the number of unemployed was 13.3 per cent higher compared with June. Saskatchewan experienced a 7.5 per cent hike in the number of unemployed when compared with the previous month.
Territories
The index averaged 99.1 points, up from 97.6.
Beginning on the week of June 25 and extending through the week of July 2, the Territories’ index was on an upward trajectory, going from 97.4 to 101.2, an improvement of 3.8 points. Then, continuing to the week of July 9, the index decelerated modestly, settling at 100.4, a decrease of 0.8 points. Continuing into the final week of July 16, the index reverted to its 97.4 value, the same as the week of June 25. Despite seeing accelerated spending growth when compared with last month, unemployment continued to rise in July for two of the Territories. The Northwest Territories saw a 1.7 percentage point change in its unemployment rate, which rose from 6.9 per cent in June to 8.6 per cent in July. Nunavut similarly saw an increase in its unemployment rate, from 16.6 per cent to 17.1 per cent. In contrast, the Yukon experienced a mild fall of 0.3 percentage points in its unemployment rate, down to 3.7 per cent.
Canada’s total nominal spending has increased for the 7th month in a row.
Powered by Moneris Data Services
Canada’s Gross Domestic Product is largely made up of consumption. One way to gauge how the economy is performing is to look at how much Canadians are spending. Yet across the Canadian economic landscape, there is a lack of readily available consumer spending data. With that in mind, we created the Index of Consumer Spending for provinces and for Canada as a whole. This unique Index is powered by exclusive consumer transaction data provided by Moneris Data Services. Moneris is Canada’s number one payment processor with over 3.5 billion transactions spanning more than 325,000 merchant locations. This index is intended to inform senior policy makers how the country and the provinces are doing. Updates on this index will be released monthly.
Disclaimer: Forecasts and research often involve numerous assumptions and data sources and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice.