Newspaper article The Canadian Press

Canadians' Faith in Economy and Job Creation Falls Sharply: Survey

Newspaper article The Canadian Press

Canadians' Faith in Economy and Job Creation Falls Sharply: Survey

Article excerpt

Faith in the economy plummets: survey

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OTTAWA - Global economic turmoil and negative reports at home are taking their toll on the faith of ordinary Canadians and Americans in the economy.

Canadians are most gloomy about near-term job prospects and the health of their finances, according to the Conference Board's latest consumer confidence survey, released Tuesday.

The consumer confidence reading for the month shows a fall of 6.8 points to 74, about where it stood in January.

It was much the same story south of the border where the Conference Board's U.S. index dropped for the fourth month in a row to 62 points, also the lowest level since the start of the year.

Economists often don't put a lot of stock in consumer confidence surveys, but Jennifer Lee, a senior economist with the Bank of Montreal, said there is reason to take these results to heart.

Canadians and Americans have been bombarded with daily reminders of the intractable nature of the European crisis and reports that businesses are holding back on investment and hiring, Lee said. In this backdrop, it is natural to assume households may also be reluctant to go out on a limb on purchasing decisions, which would further hurt the economy.

"I think there is reason for pessimism given that there is so much uncertainty out there," she said. "We're still expecting relatively strong growth in emerging markets, but we've just downgraded our outlook for Europe."

The Ottawa-based Conference Board's survey finds the responses on job prospects were among the weakest since early 2009, when the economy was in the depths of the worst recession in decades.

About twice as many (28.1 per cent) thought the job market would get worse in the next six months as those (13.9 per cent) who believed it would get better -- an 8.4-point deterioration on the issue.

"The overall balance of opinion on this question has now been negative for the past 12 months, further evidence that consumer spending in Canada is likely to slow over the coming months," the think-tank said.

As well, only 17.4 per cent said their financial situation had improved in the past six months, while 20.4 per cent said it had worsened -- a deterioration of 3. …

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