Canada spending RBC

Retail spending from Canadian consumers at the country's largest bank suggests a slight decrease in spending, with hardly any improvement year-over-year.

"Purchases of physical merchandise (excluding motor vehicles) ticked lower in December," RBC said in its month spending tracker, which is based on its cardholder data.

Spending on gifts was up just over 4% this year in Nov/Dec in nominal terms, just ahead of the 3% y/y inflation rate. However for December alone, both discretionary goods and services spending ended on a softer note.

Canadians continue to feel the squeeze of higher interest rates, but softer broader economic growth data (per-person GDP is on track to decline for a 6th consecutive quarter in Q4 2023) is bringing the Bank of Canada closer to a potential pivot to interest rate cuts, likely in the middle of the year in our own forecast.

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