Commentary and Analytics

Consumer sentiment slipped to its lowest level since last September, with the decline concentrated among households in the bottom third of the income distribution.

The dominating weakness reflected much less favorable assessments of buying conditions, mainly due to less favorable perceptions of market prices. Buying conditions for large household durables sank to the lowest level in nearly four years.

When asked to explain their views, consumers voiced the least favorable views on pricing for household durables in nearly ten years, since October 2008. Vehicle buying conditions were viewed less favorably in August than anytime in the last four years, with vehicle prices being judged less favorably than anytime since the close of 1984.

Foreign investment in Canadian securities totalled $11.5 billion in June, up from $3.0 billion in May. At the same time, Canadian investment in foreign securities increased to $11.3 billion, the largest investment since January 2018.

As a result, international transactions in securities generated a net inflow of funds of $256 million in the Canadian economy in June, for a total of $7.6 billion in the second quarter.

The Consumer Price Index (CPI) rose 3.0% on a year-over-year basis in July, following a 2.5% increase in June. While continued strength in energy prices contributed most to the year-over-year increase, higher prices for various services, including air transportation and travel tours, also contributed to consumer price growth in July.

The Bank of Canada's preferred measures of core inflation remained stable in July. All eight major components rose year over year in July. The transportation index (+8.1%) was the largest contributor to the year-over-year increase