-- The Bank of Canada on Monday released its first-quarter Canadian Survey of Consumer Expectations (CSCE).
Results of a special survey conducted after the outbreak of the war in the Middle East suggest most households expect the conflict to weaken the Canadian economy and raise prices, noted Canada's central bank in a its release.
The CSCE was conducted through an online panel from Feb. 5 to 25, before the Iran war began. Follow-up phone interviews took place from Feb. 24 to March 2. This quarter's publication incorporates results from a special survey, conducted between March 26 and April 2, on how the Middle East war is affecting consumers' views and behaviors.
In Q1, before the war in the Middle East, consumers' spending plans remained muted, held back by concerns about high prices and economic uncertainty, the BoC's survey found. Still, consumers became less negative about their spending plans than in the previous quarter as downward pressure from trade tensions eased.
Consumers continued to view the labor market as soft, with concerns of losing their job still elevated. This quarter, concerns about job losses increased among workers in sectors where artificial intelligence poses a higher risk of task replacement, added Canada's central bank.
Before the war in the Middle East, near-term inflation expectations were largely unchanged and still above the survey's historical average. Expectations of strong food price inflation remain an important driver of high one-year-ahead inflation expectations.