Source: The Canadian Press

Canada’s continuing economic drift is sapping faith in the recovery.

The Conference Board of Canada’s consumer confidence index fell for the fourth straight month in September, falling by 1.2 points to bring the index to 78.1.

That’s 18.5 points below where it stood in January, when the country was in the midst of a robust economic recovery and strong jobs growth.

But since the spring, the recovery has been losing steam with growth rates near 2% annualized, compared with 5.8% in the first three months of 2010, and 4.9% at the end of 2009.

Thursday’s report on July gross domestic product is expected to show the first outright decline since last August.

“Consumers have taken notice of the slowing pace of economic recovery,” the Ottawa-based think-tank said in its analysis of the survey of 2,000 consumers earlier this month.

The Conference Board said Canadians report their current financial position has worsened, expect employment to decline over the next six months and state they are less likely to make a major purchase.

The darkening sentiments are not dramatic, but they do point to growing pessimism in Canada, it said.

“The share of respondents who said they saw no change in their financial situation over the past six months rose to 62.6%, suggesting that the majority of Canadians have not benefited from the recovery so far,” the Conference Board said.

“Concerns over future employment are puzzling,” it added. “Despite significant job creation through the first half of the year, 20.1% of respondents continue to expect employment to decline in their communities over the next six months.”

Furthermore, the number of respondents who expect job prospects to improve over the period dropped for the sixth straight month, 1.7 points to 17.8%.

In the last jobs report, Statistics Canada noted that employment growth had slowed from 51,000 a month on average during the first half of the year, to 13,000 average in July and August.

The only glimmer of a bright spot in the report is that contrary to recent surveys, slightly _ 0.6 of a point _ said they expected their financial prospects to improve in the next six months. But this group remains less than one quarter of those surveyed.

Overall, confidence dropped in all regions in Canada except the Atlantic, with British Columbia recording the biggest decline, 7.7 points.

In Atlantic Canada, the index grew by 7.5 points to 88.2, while Quebec was virtually unchanged, and Ontario dropped the 67.3, the weakest confidence rating. Despite falling 2.9 points, the Prairies remain the most upbeat region with a reading of 96.3.