Spending momentum cools into 2026 – RBC Economics

RBC Economics’ Consumer Spending Tracker report, authored by Abbey Xu and Rachel Battaglia, shows Canadian cardholder spending softening in January 2026 after strong late‑2025 gains. Core retail sales fell on a three‑month average, with discretionary goods and essentials leading declines, while travel held up. Earlier months in 2025 still showed resilient, promotion‑driven spending, but regional data now point to slower growth and fading momentum.

Card data show softer but resilient demand

“The broader trends remain constructive, but January’s softness suggests some loss of momentum as households moved past the holiday spending period.”

“Travel was a notable exception. Growth slowed from December’s pace, but spending didn’t slip into negative territory on a three-month average, suggesting demand remained relatively steady in early 2026.”

“While regional spending hierarchies remained relatively stable through the second half of 2025, the shifting economic backdrop will set the stage for potential reshuffling. Decelerating population growth will have differentiated impacts with Ontario and B.C. at risk of population declines.”

“This deceleration is consistent with our base case forecast for household consumption to grow slower in the rest of 2025, but enough to enable modest gross domestic product expansion in Q3 despite weakness in the industrial sector.”

“Despite the pessimistic indicators, consumer spending has remained more resilient than indicators would suggest—continuing to provide underlying support for the economy, even as other sectors face challenges.”

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