Canadian consumer confidence fell to the lowest in 10 weeks amid rising gasoline prices tied to escalating violence in Iraq.
The Bloomberg Nanos Confidence Index measured 58.7 for the week ended June 13, falling from 59.5 the week before to the lowest since the first week of April. Fewer Canadians believe they are better off financially than at any time since February.
West Texas Intermediate and Brent crudes charted the biggest weekly gains this year as Islamist fighters extended their advance in Iraq, triggering concern of a return to civil war. Even with the decline, the most recent consumer confidence reading is “marginally above the 12-month average of 58.5,” said Nik Nanos, chairman of Nanos Research Group.
Futures in New York climbed 4.1 percent last week and added 4.4 percent in London. Government forces in Iraq, OPEC’s second-biggest oil producer, are seeking to dislodge Islamist militants from cities north of Baghdad after they overran army positions in Mosul.
The rack price for unbranded regular gasoline picked up at terminal locations in Toronto was 2.7 percent higher last week, according to data published by Shell Canada.
The jump in gasoline prices coincided with a slide in a gauge for personal finances. The percentage of respondents who say they’ve become better off financially over the past year fell to 17.5 percent from 20.9 percent the week before. The share of those saying they are worse off rose to 27.2 percent, the highest since May 2013.
Rising gasoline costs have been one of the biggest drivers of a spike in inflation in recent months, with pump prices rising 6.6 percent in April from a year earlier. The consumer price index rose 2 percent in April from a year ago, following March’s 1.5 percent pace. Statistics Canada will report inflation numbers for May on June 20, with economists in a Bloomberg survey expecting inflation to climb to 2 percent from a year earlier.
The Bloomberg Nanos consumer confidence index has two sub-indexes: the Expectations Index, based on respondents’ outlook for the economy and real-estate prices, and the Pocketbook Index, based on survey responses to questions about personal finances and job security. The Pocketbook Index fell to 59.3 last week from 60.4 as concern about gasoline prices offset job security numbers that were little changed.
The Expectations Index fell to 58.1 from 58.7, as Canadians pared their optimism over housing prices. The share of Canadians who expect the value of their real estate to rise in their neighborhood over the next six months fell to 41.2 percent, from 41.8 percent. Those anticipating a decrease in prices rose to 11.1 percent from 9 percent. At 30.1 percentage points, the difference between those predicting an increase and a decrease is the narrowest since April.
The Canadian Real Estate Association reported today the nation’s realtors recorded their biggest gain in sales in almost four years last month as the industry rebounds from the impact of a difficult winter.
Home sales rose 5.9 percent in May from April, the Ottawa-based agency said. The average price of a home sold in May rose 7.1 percent from a year earlier, it said.
Canada Mortgage & Housing Corp., the country’s housing agency, reported last week that new home building in May was at the strongest level in seven months as the industry rebounded from the impact of a harsh winter.