Spending Eases Following Exceptionally Strong Vacation Season
Index of Consumer Spending
In September 2025, the Index of Consumer Spending fell to 116.1—3.7 points lower compared to August (April 2022 = 100).
- Canada’s Index of Consumer Spending (ICS) continued its downward slide in September, marking three consecutive monthly declines. In June, the ICS reached its highest point on record at 123.9 points but has since eased each month and in September sat at 116.1 points.
- In September, regional ICS scores fell across the board. Of the provinces, Alberta experienced the smallest decrease, falling by 1.2 points, while Prince Edward Island (P.E.I.) experienced the largest drop, falling by 40.5 points. Among the territories, the Northwest Territories saw the smallest drop in ICS scores (0.9 points) while Yukon saw the largest drop (7.6 points).
- P.E.I.’s drop in its ICS coincides with the province entering the tail end of its travel and tourism season. July and August are the province’s busiest months for tourism, and this year, the province experienced exceptionally high growth in the number of visitors it received due to ongoing tensions between Canada and the United States. Year-over-year in August, traffic by air travel was lower, but this was more than offset by bridge and ferry traffic, which rose by 24.7 per cent, and cruises, which rose by 3.4 per cent. The sizable drop in P.E.I.’s ICS score represents a return to a more typical level of consumer traffic following an exceptionally busy August.
- Headline consumer price growth accelerated to 2.4 per cent in September, up from 1.9 per cent in August. Contributors to this acceleration include a slower decline in travel tours and a higher increase in grocery prices. The most significant driver for the accelerated growth was a smaller decline in gasoline prices year-over-year (4.1 per cent in September compared to 12.7 per cent in August).
- September as a whole benefits less from the back-to-school activity. Most of the back-to-school shopping concludes by the start of September and is part of the reason for the national ICS score ending lower in September from August.
- Despite an increase in jobs numbers in September, Canada’s unemployment rate remained steady at 7.1 per cent for the month. The generally weak labour market likely also contributed to the decline in the ICS in September.
- Consumer sentiment (as indicated by the Index of Consumer Confidence) remains weak. Despite seeing a very slight improvement at the aggregate in September, it ticked down in Ontario, Quebec, and British Columbia. Weaker confidence across Canada’s three most populated provinces likely weighed on national consumer spending this month.
September as a whole benefits less from the back-to-school activity.
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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.