One of the more recent — and helpful — tools for tracking consumer activity in our economy that has emerged in the last year or two has come from the banks monitoring the ins-and-outs of activity in their customer accounts.
Before this, we waited for StatsCanada to bring us the monthly retail or consumer spending numbers but they were generally about four to eight weeks after the fact. The bank tool allows us to get much more current data – virtually real-time tracking of consumer spending.
What they are now seeing is that higher interest rates are making a difference – that consumers are realigning their spending habits.
An RBC report says consumers are generally paying 10 per cent more today than they were a year ago for essentials. And, with rising interest rates hiking the cost of rent or a mortgage, average consumers are cutting back in discretionary expenditures.
In short, what was predicted is now happening. Spending on restaurants is falling as people eat at home more often and travel spending fell in August and September after peaking in early summer.
