The consumer confidence of Canadians has perked-up a bit according to the latest reading by the Conference Board of Canada. The non-partisan, non-profit economic think-tank says its index rose 2.3 points, to 75.1 in August. The index fell 6.6 points in July.
At least some of that improvement appears to be tied to the slightly improved inflation reading in July. The pace of consumer price increases dipped back to 7.6% after hitting 8.1% in June. Almost all of that decline came from lower gasoline prices.
According to the Conference Board, Canadians remain wary of inflation and the rising interest rates being used to fight it – and not without good reason.
Both the Bank of Canada and the U.S. Federal Reserve have repeated their intentions to continue, aggressively, raising their policy rates until inflation falls back into their target range of 1% to 3%.
The latest reassertion of that came Friday from U.S. Fed Chair Jerome Powell, at the annual meeting of central bankers in Jackson Hole, Wyoming.
“Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy,” Powell said.
Powell also, very directly, warned there will be financial pain for many households and businesses. Higher rates will slow the economy and potentially increase unemployment.
"These are the unfortunate costs of reducing inflation." But a failure to restore price stability would mean far greater pain," he said.