Summer Activity and Added Jobs Boost Demand
Index of Consumer Spending
In June 2025, the Index of Consumer Spending rose to 123.6—an increase of 2.3 points from May (April 2022 = 100).
- In June 2025, the Index of Consumer Spending (ICS) increased across all provinces and territories apart from Manitoba, where it remained effectively flat, in part due to the province’s wildfire emergency. As in May, the index for Prince Edward Island increased by the greatest margin (16.7 points) in June. The Atlantic provinces saw the largest increase among the provinces, taking the top three spots.
- In Prince Edward Island, the labour force grew 0.6 per cent and employment grew 0.2 per cent. Notably, the unemployment rate for its population segment aged 15 to 24 years fell by 25.0 per cent between May and June. The significant decrease in this cohort’s unemployment rate played a role in the province’s ICS growth, as younger demographics typically possess a higher propensity to consume.
- The Canadian economy overall added 83,000 jobs in June, dropping the unemployment rate to 6.9 per cent and helping to lift the ICS.
- ICS growth during the summer is in line with seasonal patterns. Warmer months typically see increased travel, greater retail activity, and stronger demand in food services and accommodation, all of which contribute to higher consumer spending.
- Nationally, the Consumer Price Index (CPI) increased by 1.9 per cent year-over-year in June, which was 0.2 percentage points higher than May’s 1.7 per cent year-over-year increase. Price inflation in durable goods (plus 2.7 per cent) and clothing (plus 2.0 per cent) placed upward pressure on the CPI in June, while slower grocery price growth month-over-month (plus 2.8 per cent) placed downward pressure on the CPI.
- Newfoundland and Labrador had the second-largest ICS increase in June. The province also saw the largest percentage-point increase in the CPI, increasing from 0.5 per cent in May to 1.2 per cent in June.
- Tariffs have increased the cost of goods imported from the United States and are a large factor contributing to the higher ICS score seen in June. We expect the influence of tariffs on consumer prices to continue to work through the economy and exert added pressure on prices as firms using FIFO accounting deplete their old, cheaper inventory and begin restocking at higher costs.
- Consumer confidence remains weak in Canada. Weaker confidence, specifically regarding current and future finances, is working against ICS growth as consumers prioritize savings and become more selective in their purchasing decisions.
- The Bank of Canada opted to hold interest rates steady in June, offering no further relief for consumers facing high debt-servicing costs. At the same time, average hourly wage growth slowed to 3.2 per cent year-over-year. Together, these factors put downward pressure on household disposable income and limited ICS growth for the month.
Consumer confidence remains weak in Canada.
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.