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June spending snapshot: Growth in RBC Canadian cardholder spending held relatively stable in June as consumers continued to balance higher costs for essentials while selectively spending on seasonal experiences such as sporting events.
Our estimate of core retail sales from cardholder transactions (excluding purchases of gasoline and autos) edged up 0.5% in June on a three-month average, similar to May, suggesting spending momentum remained positive despite ongoing budget pressures from higher energy prices.
Spending on discretionary goods led the way, posting the strongest gain among major categories on a three-month average. Essentials’ spending—including gasoline—also contributed to growth, while discretionary services rebounded after softening in May. Excluding gasoline, essential spending rose 0.5% on a three-month average, a welcome improvement after earlier signs of easing.
The breadth of spending increases across categories points to households maintaining a cautiously optimistic view heading into the summer even as they remain selective about bigger-ticket discretionary purchases.
The details:
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Gasoline spending continued to outpace other categories, rising 2.3% on a three-month average. Gas prices were still up on a three-month average due to higher oil prices, but declined about 10% seasonally adjusted in June.
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Entertainment and arts posted the second strongest gain at 1.7%, underscoring continued appetite for experience-related spending as summer activities pick up, including spending likely related to the FIFA World Cup.
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Spending on clothing extended its positive trend, while dining also increased 0.7%, reversing weakness from prior months as consumers grew more comfortable with meals out with the improving weather and social activity.
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Travel remained the outlier, continuing its decline on a three-month average, although the pace of contraction moderated in June. Households appear to remain cautious about larger discretionary purchases, but may be warming to travel deeper into summer.
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Provincial trends were broadly positive with most regions posting spending growth on a three-month average. Ontario and British Columbia tied for the strongest performance, while Saskatchewan and Prince Edward Island were the only provinces to see declines.
About the authors:
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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