Consumer Confidence (MoM)

Canada vs US consumer confidence: both populations are unhappy, both bottomed in early 2025, and the recovery only happened on one side of the border

Consumer confidence in both countries collapsed in February and March 2025 in the immediate aftermath of Donald Trump's tariff executive orders. Canada's Conference Board Index of Consumer Confidence (now published by Signal49 Research) fell to 44.2 in March 2025 — described in the official release as "Plunges to Historic Low." The University of Michigan Consumer Sentiment Index hit 52.2 in April and May 2025. The Conference Board US Consumer Confidence Index Expectations component fell to 65.2 in March 2025, well below the 80-point recession-signal threshold, where it has remained for the entire 12-month period since. The recovery in Canada has been clear; the recovery in the US has not. This page is about the divergence and the surprisingly large role that an election played in it.

The Conference Board Canada series is what your normalized OECD chart above is tracking. For the indicator definition see the Consumer Confidence indicator page. This page is about the year both populations stopped trusting the macro story.

The numbers — three different surveys, three different conclusions

Each country has multiple confidence indices and they do not always agree. The headline series:

Canada — Conference Board / Signal49 Index of Consumer Confidence (2014 = 100):

• February 2025: 52.6 (-12.0 pts; "levels similar to the pandemic era")
• March 2025: 44.2 — "Plunges to Historic Low" (the trough)
• April 2025: 48.4 (bounce despite tariff headwinds)
• May 2025: 52.9
• July 2025: 62.7 (fourth consecutive monthly gain)
• August 2025: pullback after BoC held at 2.75%
• December 2025: largely unchanged from a year earlier

United States — University of Michigan Consumer Sentiment Index (1966 Q1 = 100):

• April 2025: 52.2
• May 2025: 52.2 (unchanged)
• June 2025: 60.7
• July 2025: 61.7
• August 2025: 58.2 (vs 67.9 a year earlier)
• November 2025: 51.0
• December 2025: 52.9
• January 2026: 56.4
• February 2026: 56.6
• March 2026: 53.3 — near record lows, down from a 55.5 preliminary

United States — Conference Board Consumer Confidence Index (1985 = 100):

• December 2024: 109.5 (revised)
• January 2025: 104.1
• February 2025: 98.3 (Expectations 72.9; biggest drop since August 2021)
• March 2025: 92.9 (Expectations 65.2 — 12-year low)
• April 2025: 86.0
• December 2025: 89.1 (Expectations 70.7; fifth consecutive monthly decline)
• January 2026: 84.5 (sixth straight month of weakness)
• March 2026: 91.8 (Expectations 70.9)

The key fact across all three series: the US Conference Board Expectations Index has been below 80 (the recession-signal threshold) for the entire 12-month period since February 2025, while Canadian sentiment has staged a clear if incomplete recovery from the March 2025 trough.

The Carney election was the single biggest event in Canadian sentiment in 2025

The Canadian timeline maps almost exactly onto political events. Justin Trudeau announced his resignation on January 6, 2025. Trump signed his three IEEPA tariff executive orders on February 1. The Conference Board ICC fell from 64-ish in January to 52.6 in February (immediate tariff shock) to 44.2 in March (the trough, before the federal election was called). Mark Carney won the Liberal leadership on March 9 with more than 85% of first-preference votes, was sworn in as PM on March 14, and called a snap election. The Liberals won 169 seats — a minority — on April 28. The ICC moved from 44.2 in March to 48.4 in April to 52.9 in May to 62.7 by July — a four-month run of gains and a near-50% recovery from the trough.

The Bloomberg-Nanos Canadian Confidence Index, which is published weekly and is a useful tie-break, hit 48.6 in mid-May 2025 — its best reading in nine weeks. The share of Canadians who expected the economy to strengthen over the next 6 months rose from 10% in early April to 16% in mid-May, while the share expecting weakening fell from a March peak. The political channel was real, fast, and large enough to dominate the macro signal.

The US has had no equivalent recovery — and the partisan story is part of why

The pre-election US picture was different. Sentiment surged after the November 5, 2024 Trump victory (CCI hit 109.5 in December 2024) and then collapsed continuously through the first four months of 2025. The University of Michigan's April 2025 paper "Partisan Perceptions and Sentiment Measurement" finds that between September 2006 and February 2024, being affiliated with the incumbent president's party lifted reported sentiment by about 28 points (31%) relative to the level predicted by economic fundamentals. The remarkable thing about 2025 is that the partisan flip did not produce a sustained Republican-led sentiment surge. UMich documents that all three political groups fell in parallel through 2025 — meaning the broad weakening is not a Democratic post-election sulk.

This is unusual. In a normal post-election year the winning party's voters carry the headline up; in 2025 the underlying gloom was strong enough to overwhelm the partisan flip in both the UMich and Conference Board series. The most natural reading is that the IEEPA tariffs, the steel/aluminum/auto tariff escalations, and the persistent inflation expectations stuck above the Fed's 2% target overcame the partisan tailwind that would normally have lifted the post-election number.

UMich vs Conference Board — the gap is methodology, not contradiction

Through 2025 the two leading US sentiment indices diverged unusually: UMich at 52.2 in April was much weaker than the Conference Board at 86.0. Both are weak but the gap is large. The methodological difference matters: UMich is a phone/internet survey of about 600 households focused on personal finance and inflation expectations. The Conference Board is a much larger mail/online survey weighted toward labour market conditions — its "jobs plentiful versus jobs hard to get" gap is the underlying anchor. UMich is more sensitive to gas prices, grocery prices, and tariff news; the Conference Board is more sensitive to whether a respondent currently has a job.

In 2025 those two channels diverged. Inflation expectations rose sharply (UMich 1-year ahead hit 4.3% in February 2025, the highest since November 2023; the 5-year ahead hit 3.5% in February 2025, the highest since April 1995 — about 30 years) while the labour market remained reasonably resilient through Q2 and Q3. UMich captured the inflation channel; Conference Board captured the labour channel.

Canadian inflation expectations are remarkably anchored — the BoC story

The Bank of Canada's Q4 2025 Canadian Survey of Consumer Expectations is the cleanest single statistic in this whole comparison. One-year-ahead inflation expectations are 3.0% (down from 3.2% in Q3). Five-year-ahead expectations are about 2.8%, which is below the pre-pandemic average. Tariffs are still cited as the most frequently mentioned driver of expected inflation, but less than in Q3, and three-quarters of consumers who think tariffs are inflationary expect the effect to last 1–5 years rather than permanently.

The contrast with the US is stark. The New York Fed's Survey of Consumer Expectations had US 1-year inflation expectations stuck at 3.2% to 3.4% through 2025 with the December reading bumping up to 3.4%. UMich's 5-year reading at 3.5% is the highest in three decades. Canadian inflation expectations have been notably more anchored than American ones throughout 2025, despite the fact that Canada was the smaller country directly targeted by US tariffs. The most natural reading: the Bank of Canada's communications and the Carney government's fiscal credibility have held inflation expectations down even through the tariff shock. See the CPI compare page for the underlying inflation context.

The vibecession debate has split the literature

The "vibecession" framing — coined by Kyla Scanlon in a June 2022 newsletter — was originally about a disconnect between weak sentiment and reasonable hard-data fundamentals. By April 2025 Scanlon herself was on record saying "we are not in a vibecession" — but UMich plunged 11% in March 2025 alone and was 22% lower than December 2024. The hard-soft data disconnect has largely closed. Sentiment is weak because the labour market is weakening, inflation expectations are stuck above 3%, and tariff uncertainty has imposed a real cost on businesses and households. It is no longer a vibecession; it is a recession risk being correctly priced into sentiment data. The Bank of Canada's Q4 2025 Business Outlook Survey reported that the share of Canadian firms planning for a domestic recession in the next 12 months has eased from 33% in Q1 to 22% in Q4, the lowest reading in 2025 — but still well above the typical 10–15% baseline.

The housing affordability backdrop in Canada

Robert Hogue at RBC reports that the bank's national aggregate housing affordability measure improved to 53.2% of median income in Q3 2025 from an all-time high of 63.5% in 2023. The latest gain was only 0.4 percentage points, against an average 1.7 pp drop in the prior six quarters — improvement is decelerating and Toronto and Vancouver still see ownership consuming about 68% of median income. Hogue's framing: "We see improvement slowing with the Bank of Canada likely on hold through 2026." The housing-affordability channel is the slowest-moving of the consumer-sentiment drivers and explains a lot of why the Canadian recovery in headline sentiment has not yet translated into a recovery in the affordability mood music. See the house price to income compare page.

Bank of Canada framing: structural, not cyclical

Both Tiff Macklem and Carolyn Rogers have framed the 2025 trade shock as a structural rather than cyclical event. Macklem's December 16, 2025 speech "Good money and your central bank" called 2025 "a story about uncertainty and the loss of trust in the trade relationship with Canada's biggest partner." His October 29, 2025 Monetary Policy Report opening statement noted Q2 GDP contracted 1.6% and that "trade conflict is reorganising" the Canadian economy, even as household spending was "resilient." The Rogers framing in her October 9, 2025 Toronto Canadian Club speech was that "increased trade friction with the United States means the economy works less efficiently, with higher costs and less income — this is more than a cyclical downturn but a structural transition."

This is the diagnosis underneath the consumer confidence story. Senior BoC leadership treats the 2025 sentiment collapse not as a reaction that will mean-revert when the news cycle changes, but as a permanent re-rating of trust in the cross-border relationship. Whatever the 2026 ICC reading turns out to be, the Bank's view is that the underlying productive economy is dealing with a different set of trade rules from the one it had at the start of 2025.

What to watch in 2026

1. Conference Board / Signal49 ICC — monthly, last week of each month. Watch whether the Q1 2026 readings hold above the December 2025 level after the Section 122 tariff replaced the IEEPA regime on February 24, 2026.
2. UMich Consumer Sentiment — preliminary mid-month, final last Friday. The March 2026 reading of 53.3 is near record lows; April–June will show whether the post-SCOTUS bounce shows up.
3. Conference Board US CCI — last Tuesday of each month. The Expectations Index has been below 80 (recession-signal threshold) for 12 consecutive months. Watch whether it crosses back above 80 in Q2 2026.
4. NY Fed SCE — second Monday of each month. January 2026 had job-finding expectations at a series low; that is the cleanest US labour-market sentiment indicator.
5. BoC Q1 2026 CSCE (April 2026). First post-Section-122 reading of Canadian inflation expectations. Watch whether the 1-year reading stays at 3.0% or drifts higher.
6. BoC Q1 2026 BOS (April 2026). Watch the recession-share figure — it eased from 33% to 22% through 2025; under 20% would be a meaningful all-clear signal.

The stakes

Consumer confidence is a soft-data leading indicator and a real input into household spending decisions. The 2025 Canadian collapse and partial recovery is the cleanest political-economy event in the series since the 2020 pandemic; the US weakness is more persistent and harder to attribute to a single shock. The most useful framing is that Canadians and Americans have responded differently to the same tariff war: Canadians blamed Trump and rallied around Carney, producing a clean political recovery; Americans dispersed the blame, kept inflation expectations stuck above target, and have not yet had a comparable bounce.

The short version: both countries' consumer confidence indices fell off a cliff in February and March 2025; Canada's recovered roughly halfway by July on the back of Carney's election win and much-better-anchored inflation expectations; the US has not recovered at all, with the Conference Board Expectations Index below 80 for a full year and UMich near record lows. The Canadian central bank has treated the shock as structural; the data so far suggest that even the structural story is dominated by the political-economy story of which side of the border voted on the trade war and which side did not.