Consumer Sentiment Holds Up Amid Canada’s Economic Contraction

Canadian household confidence remained near the 2015 high last week even after a report showed the economy mired in its longest contraction since the last recession.

The Bloomberg Nanos Canadian Confidence Index fell to 56.6 in the week ending July 3 from 56.8 a week earlier. The index has exceeded 56 since mid-April and the 2015 high of 56.9 was set May 22.

Finance Minister Joe Oliver said Friday the world’s 11th largest economy isn’t headed for a recession and there are signs of optimism from consumers and manufacturers. Statistics Canada reported June 30 the economy shrank 0.1 percent in April, with the fourth straight decline led by a fall in energy output.

While the main confidence index remained steady, its sub-indexes edged downward. The survey’s Pocketbook gauge, based on responses about job security and personal finances, fell to 60.3 from 60.6 the week earlier. The Expectations measure, based on responses about the outlook for real estate and the national economy, fell to 52.9 from 53.

The polling data showed more enthusiasm about the housing market than personal finances. As the economy contracts, 59.2 percent of respondents said their own finances were unchanged over the last year, the highest in records back to mid-2008. And the 16 percent who said they were better off was the lowest since the end of 2009. On real estate, 38 percent said local prices will rise over the next six months -- the highest since late April.

The Nanos poll is based on a four-week rolling average of 1,000 responses taken in a random telephone survey. The results are considered accurate within 3.1 percentage points, 19 times out of 20.

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