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February spending snapshot: RBC Canadian cardholder spending showed modest improvement in February despite consumers continuing to cut back on discretionary goods spending.
Our core retail sales measure on a three-month average remained negative at -0.1%, but marked an improvement from -0.3% (seasonally adjusted), indicating the decline eased in February after weather-related disruptions and post-holiday fatigue weighed on spending in January.
We expect higher oil prices will drive up purchases at gas stations. The impact on other essentials and discretionary spending is less clear as it will depend on how consumers allocate their remaining income, and the extent to which they tap into their savings.
The details:
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February’s contraction came entirely from discretionary goods—clothing and related retail segments was among the weakest performers.
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Weakness in discretionary goods spending was partially offset by spending growth in discretionary services and essentials. Travel, entertainment and art posted the strongest gains on a three-month average, pointing to continued resilience in experience-related spending.
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Spending grew in most provinces on a three-month average following the January slowdown. Ontario, hit particularly hard by winter storms, showed notable recovery in February as conditions moderated.
About the Authors:
Rachel Battaglia is an economist at RBC, providing forecasts for the Canadian provincial economies and analyzing key trends in housing and consumer spending.
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.
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