Canadian Consumers Maintain Spending Despite Rising Energy Costs

Canadian consumers continued to spend through another challenging quarter, possibly relying on savings or taking on more debt to maintain their consumption patterns despite weak real wage gains and higher energy costs.

According to RBC's Q2 cardholder transactions, overall spending accelerated, consistent with signs of improvement in the broader economy. However, some of this gain likely reflects increased spending to keep up with rising gasoline prices.

The core retail sales (excluding gas station spending) rose 2.4% in Q2 from Q1, indicating broader consumer strength. Purchases of essentials excluding fuel grew 2.2%, matching growth in discretionary services spending - where cardholders prioritized social experiences during the summer event season.