Weaker Housing Affordability Impacts Canadian Purchasing Power According to RBC Report
RBC's Latest Consumer Spending Report
RBC released its latest Canadian consumer spending tracking data on Friday with insights based on credit card data. The report highlights a decline in nominal sales but an increase in services spending, showcasing the impact of weakened housing affordability on household purchasing power. Key findings indicate a decrease in consumer spending on discretionary goods, contrasting with steady essential expenses.
Notable Trends:
- Uptick in Hotel Spending: February saw an upturn in hotel spending after six months of decline.
- Weakness in Restaurant Spending: Continual weakness observed in spending on restaurants.
- Flat Spending on Home Improvement: Expenditure on home improvement remains unchanged.
- Sagging Clothing and Footwear Spending: Decline in discretionary goods expenditure.
According to RBC, the diminishing housing affordability and soft job market in Canada have significantly impacted consumer spending patterns, with cautious optimism on growth rebounding in the future.
BOC's Outlook
RBC's report suggests a potential rebound in growth later this year, largely driven by a forecasted increase in services sector consumption. However, the success of this recovery depends on the Bank of Canada's decision to pivot to interest rate cuts by mid-year.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.