Canadian consumers defy gloom in holiday season: TD

By James Langton | January 18, 2023 | Last updated on January 18, 2023
2 min read

Notwithstanding concerns about inflation, rising interest rates and a deteriorating economic outlook, consumer spending proved robust in December, according to a new report from TD Economics.

Citing data from its customers’ debit and credit card transactions, the bank’s economists reported that spending rose by 2.2% in December, after pulling back in November.

“Despite significant financial headwinds, Canadian consumers kept spending through December in what could be the last hurrah before tightening their belts in 2023,” the report said.

After a weak spring and summer, consumer spending has been stronger in the fall, it noted.

“The data bodes well for retail sales in December and overall consumer spending in the fourth quarter should also fare better following the negative print in the third quarter,” TD said.

Spending on both goods and services picked up in December, with services spending continuing to outpace goods purchases, the report said.

“For example, spending on entertainment and recreation was still up 23% from a year ago, and spending on travel was up a hefty 119% year-over-year. At the same time, spending on housing related items, such as furniture, appliances and building materials was down 7% from a year ago,” it said.

The effects of inflation are evident in the data, too. While the value of consumer spending on cards was up 9.6% year over year, the volume of spending was up a more modest 2.9%.

“Although inflation has eased a bit in recent months, it remains high, boosting the dollar value of spending,” it said.

Consumers bought fewer goods, the report said, but the volume of spending on services was up 13.4% from a year ago after adjusting for prices, it said.

Overall, spending growth has eased in the second half, the report said, “as financial headwinds intensified, and pent-up demand became increasingly tapped out.”

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.