Canadian consumer sentiment declined from the highest in five months last week on deteriorating perceptions about job security, telephone polling shows.
The Bloomberg Nanos Canadian Confidence Index fell to 56.7 in the week ending May 29, from 56.9 in the previous period. The share of respondents who reported feeling secure or somewhat secure about their jobs dropped to 68.4 percent, the lowest this year.
The weaker Nanos readings on the job market come after a May 8 report showing Canada lost 19,700 positions in April, with unemployment remaining at 6.8 percent for a third month. The labor force participation rate fell to 65.8 percent, close to the lowest since 2000. The next labor market report due June 5 is expected to show a gain of 10,000 jobs, according to a Bloomberg economist survey, with the unemployment rate again unchanged.
Canada’s central bank kept its key interest rate at 0.75 percent last week and said there’s evidence the country’s economy is recovering from a drop in crude oil prices. Some of that optimism was dented by reports Friday showing gross domestic product shrank in Canada and the U.S. in the first quarter. In Canada, the 0.6 percent annualized decline was led by lower business investment and consumer spending on cars.
“With the economy struggling amid the backdrop of lower oil prices and a soft start to the year for the U.S. economy, employment growth likely remained weak in May,” Benjamin Reitzes, a senior economist at BMO Capital Markets in Toronto, wrote in a research note.
Every week, Nanos Research asks Canadians for their views on personal finances, job security, the outlook for the economy and where real estate prices are headed. The survey data for last week showed 18.9 percent of people expected a stronger economy in the next six months, the highest since January.
For housing, 34.8 percent said prices in their neighborhood will rise in the next six months, while 16 percent saw them declining. The gap between optimists and pessimists, at 18.8 percentage points, is narrower than the 12-month average of 24 percentage points.
Among regions, consumer confidence was highest in British Columbia with a reading of 60.9, followed by Ontario at 58.6, the Prairie region including Alberta at 55.2 and Quebec at 54.7. Atlantic Canada was the least optimistic region, registering a reading of 52.5.