MNI: Canada Firms See Better Sentiment, Slower Prices- CFIB

Canadian business owners feel more confident about the next 12 months and predict slower price increases, according to a survey Thursday from the CFIB trade association, adding to evidence a worst-case scenario is being avoided in the U.S. trade war. 

The Canadian Federation of Independent Business sentiment barometer climbed 3.4 points to 50.9 this month, extending a rebound from a low of 25.5 as Donald Trump escalated tariff threats. The figure remains below a historical average of about 60. 

Respondents also expect price increases of 2.7% over the next 12 months, down from 2.9% in June and peak of 3.6% in March. Expected wage gains also remain modest at 2.1%.

Bank of Canada officials are paying closer attention to more real-time surveys lately as they assess their economic scenarios around the trade war. Most economists predict the Bank will hold interest rates for a third meeting on July 30 after Statistics Canada reports showing a major job gain and core inflation stuck at 3%. Canada and the U.S. also face an Aug. 1 deadline to strike a trade deal before Trump imposes a 35% tariff. 

"Insufficient demand remains elevated due to tariffs and counter-tariffs, and high uncertainty. Labour shortages are easing overall with employers having less appetite for hiring," the report said. (See: MNI INTERVIEW: Mild Stimulus Cures Canada Recession- Ex-Clerk)