Canadian Consumer Spending Accelerated in Q2 Amid Challenging Conditions, RBC Data Shows
Key Takeaways
- •Canadian consumer spending rose 2.4% in Q2 when excluding gas station sales, indicating growth beyond higher fuel costs.
- •Discretionary goods spending increased 3.7% compared to the first quarter, suggesting improved durability of household demand.
- •Household and construction purchases recorded their first quarterly gain since mid-2025, coinciding with renewed homebuyer interest.
- •FIFA World Cup activity drove food and drink vendor spending to 12.5% of total cardholder spending, the highest share since the survey began in 2018.
- •Canada is scheduled to release official June retail sales data on August 21, enabling comparison against RBC's cardholder trends.
Canadian Consumer Spending Accelerated in Q2 Amid Challenging Conditions, RBC Data Shows
RBC cardholder data revealed that overall consumer spending in Canada gained momentum during the second quarter, with growth extending beyond higher gasoline prices. The figures offer a timely read on household demand, which accounts for the largest share of Canadian economic activity and is closely watched as a barometer of broader economic health.
According to Royal Bank of Canada (RBC), spending rose 2.4% in Q2 when excluding sales at gas stations. Spending on discretionary goods also increased, climbing 3.7% compared to the first quarter. The pickup in non-gasoline and discretionary categories suggests the acceleration was not solely driven by fuel costs, a distinction that matters for economists assessing the durability of demand.
"Household and construction purchases saw its first quarterly gain since mid-2025, coinciding with early signs of renewed homebuyer interest. Spending on clothing and apparel also strengthened after a slow start to the year," RBC said in its report.
RBC economists indicated optimism that consumer spending will continue through the second half of the year, even as energy costs remain elevated. Bank cardholder data typically provides a more current snapshot of consumer behavior than official retail trade statistics, making it a widely followed early indicator.
The FIFA World Cup provided an additional boost to consumer activity. RBC reported a significant increase in spending at food and drink vendors throughout the tournament period. This surge pushed the category's share to 12.5% of total cardholder spending—the highest level recorded since the survey's inception in 2018.
Looking ahead, Canada is scheduled to release retail sales figures for June on August 21. Those official figures will allow comparison against the cardholder trends. Meanwhile, the United States will publish its own retail sales data this Friday.
The Canadian dollar (CAD) remains in focus as markets await these upcoming economic indicators, with consumer spending data among the inputs that feed into the Bank of Canada's assessment of the economic outlook.
