Royal Bank of Canada (RBC) analysts Abbey Xu and Rachel Battaglia report that June spending by RBC Canadian cardholders remained relatively stable, with core retail sales up modestly. Discretionary goods led gains, while essential spending including gasoline also contributed. Excluding gasoline, essential spending improved, and households appear cautiously optimistic into summer despite higher energy prices and selectivity on larger discretionary purchases.

Card data show steady retail momentum

"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."

"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."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)