RBC credit card transactions point to a second consecutive tick higher in per-person real retail spending (excluding autos) in Q1. The latest data shows a pickup following eight consecutive declines but it’s not all good news as March spending on goods — particularly furniture and clothing — was soft. That was contrasted with increasing services spending.
“March RBC consumer spending data suggests Canadian household spending is still running cold (on a per-person basis) but there are early signs of thawing,” RBC writes. “We look for Canadian consumer spending to remain soft in the first half of this year before ticking higher in the second half.”
Much of the spending pickup was on groceries and gasoline while car buying continues to retrench due to high interest rates.
Services discretionary spending rose for the sixth consecutive quarter and spending on eating out and hotels showed a nice bump in March.
Overall, I don’t see any great signs for Canada but the spring housing market has done much better than feared and I’m fairly confident we’ve reached a bottom. If anything, I’m afraid that bidding wars come back.