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Canada consumption stayed resilient as energy pressures rose in Q2

RBC said fuel outlays are taking a larger share of household budgets, but discretionary spending rebounded and insolvencies remain below pre-pandemic levels.

Reported · Written up by our desk · Central Banks

FXStreet highlights Royal Bank of Canada commentary from analysts Rachel Battaglia and Abbey Xu, saying Canadian consumers kept spending up in Q2 even as real wage gains stayed weak and energy costs rose.

The bank noted that higher fuel outlays are absorbing more of household budgets, but discretionary goods and services spending, including sports-related activity, rebounded.

RBC also pointed to insolvencies staying below pre-pandemic levels, supporting a cautiously optimistic view for consumption through 2026.

The broader market context in the same note pointed to subdued US dollar reaction as September Fed hike bets were held back, alongside low volatility and thin liquidity.

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