Fewer Jobs in July Means Tighter Budgets
Index of Consumer Spending
In July 2025, the Index of Consumer Spending fell to 120.4—3.5 points lower compared to June (April 2022 = 100).
- In July 2025, the Index of Consumer Spending (ICS) largely saw declines across provinces. The exceptions were British Columbia, which saw a marginal increase of 1 point, and Prince Edward Island, which spiked by 25 points. Given its small population relative to other provinces, the surge seen in P.E.I. was not enough to outweigh the losses seen in more populus provinces like Ontario and Quebec, ultimately resulting in the index coming in lower than the month of June.
- Playing a significant role to the surge for P.E.I. this month was tourism. To start, July is the height of the province’s tourism season and so a month-to-month increase was anticipated given the historic trend. But P.E.I. has seen especially strong tourism this year due to the rhetoric and policies from President Trump and the new administration south of the border. Many Canadians have been discouraged from travelling to the United States due to the actions and statements from the administration. Several have opted to travel domestically for summer vacations, prompting higher visitations and added spending in the East Coast province.
- Saskatchewan saw the largest drop in consumer spending this month, falling by 11.8 points. Although the drop is large, this is in line with seasonal trends for the province. Going back to 2021, the province’s consumer spending has consistently declined from June to July each year.
- July’s employment numbers went negative, falling by 41,000 jobs. The weaker job market likely contributed to the decline in consumer spending seen for the national ICS. This is reinforced by the job losses among youth (ages 15 to 24). Young people tend to spend a larger share of their income, so changes in youth employment can have a bigger impact on overall consumer spending power.
- Consumer confidence continues to struggle in Canada following the economic and trade uncertainty induced by the new U.S. administration. In July, our Index of Consumer Confidence measured 62.7 points—compared to 67.2 points the same time last year. Consumers’ views on their financial situations and job prospects have stifled ICS growth in particular. Of the consumers surveyed, the percentage who saw their current and future financial situations improving was in the low teens. Job prospects are especially low, with the share of consumers who expected to see more job opportunities sitting below 10 per cent.
- Wage growth and the number of hours worked was essentially unchanged between June and July. The lack of growth implies there was little added upward pressure on consumer spending via added household income.
- The impact of tariffs has not yet been fully felt in consumer spending. Canada’s retaliatory tariffs were expected to have an impact on goods prices in Canada. However, many businesses have opted to absorb the tariff cost for the time being, shrinking their margins in the short term in an effort to keep customers. So far, the effect on prices and consumer spending has been minimal.
- Nationally, the Consumer Price Index rose by 1.7 per cent year-over-year in July, which was 0.2 percentage points lower than in June. Moderated inflation will continue to place less pressure on nominal consumer spending totals and lessen ICS growth.
- Mortgage renewals continued in July. Households who previously held fixed rate mortgages at historically low rates will see significantly higher monthly mortgage costs once they renew. The higher costs will chip away at disposable income, which could have been spent on discretionary goods and services, thereby applying downward pressure on the ICS.
Consumer confidence continues to struggle in Canada following the economic and trade uncertainty induced by the new U.S. administration.
Powered by Moneris Data Services
The Index of Consumer Spending 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. Our index tracks incremental changes in net transaction volume month-over-month from a set starting point (April 2022 = 100), enabling us to gauge economic activity levels across the country and provide insights into how the Canadian economy is performing coast to coast.
Updates on this index will be released monthly.
The Index of Consumer Spending’s (ICS) methodology has been revised for releases from January 2024 onwards. The ICS no longer tracks the weekly year-on-year changes in consumer spending. Instead, the ICS now tracks the incremental changes in net transaction volume month-over-month, from a set starting point (April 2022 = 100).
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.