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March spending snapshot: RBC Canadian cardholder spending firmed modestly in March with underlying activity continuing to stabilize despite ongoing softness in discretionary goods.
A sharp increase in gasoline prices, tied to geopolitical tensions, boosted spending at fuel stations, and contributed to strength in essentials’ purchases. Excluding gasoline, spending still increased in March, although at a slower pace than February.
Growth in spending edged lower on a three-month average, largely reflecting a pullback in January with activity over February and March broadly improving.
Our core retail sales measure rose 0.3% on a three-month average from -0.1% (seasonally adjusted), extending the gradual improvement seen since the start of the year.
The details:
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Spending on gasoline surged 9.1% in March as conflict in the Middle East pushed oil prices higher.
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Excluding gasoline, spending still rose in March, but slowed from February, remaining weak on a three-month average.
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Clothing and related retail segments continued to contract on a three-month average, largely reflecting a pullback in January with spending firmer in the following two months.
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Service categories remained the primary source of non-gasoline related growth with entertainment and arts leading gains, reinforcing the ongoing shift toward experience-related spending.
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Provincial trends were mixed with declines persisting in British Columbia and New Brunswick, while other regions, including Quebec and Ontario, showed modest gains or stabilization.
About the Author:
Abbey Xu is an economist at RBC. She is a member of the macroeconomic analysis group, focusing on macroeconomic forecasting models and providing timely analysis and updates on economic trends.
Rachel Battaglia is an economist at RBC, providing forecasts for the Canadian provincial economies and analyzing key trends in housing and consumer spending.
By Carrie Freestone
RBC’s consumer spending tracking report uses RBC Data & Analytics’ proprietary database of anonymized card transactions by Canadian clients. The data are an accounting of merchant transactions that are divided into various spending categories covering tens of millions of weekly card transactions worth billions of dollars each week. Transactions, both in person and online, are classified into 11 broad spending groups: Dining, Education, Finances, Groceries, Health, Household, Shopping, Transport, Travel, Utilities, and Other. Within each group, the data are further classified: for example, shopping covers merchants classified as clothing stores, hobby shops, electronics stores, and jewelers, among others. We exclude purely financial transactions such as cash advances and insurance from spending.
We examined changes in the value of all transactions in these areas using a 7 day rolling sample starting January 1st of each year that is indexed to pre-covid levels which are calculated as the average spending for the month of February 2020. To examine the impact of seasonal factors, we also show each’s year spending profile which depicts monthly trends in spending. Online spending volumes are estimated based on the presence of an RBC card at the time of the authorization.
Protecting your privacy and safeguarding your personal information is a cornerstone of our organizational ethics and values and will always be one of our highest priorities. The underlying data for this analysis was aggregated based on transaction date, region and merchant category, and cannot be used to identify any individual client or merchant. For additional information please visit www.rbc.com/privacy.
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