Consumer or retail spending just won’t slow down.
The most common measure of inflation in this country is the CPI or Consumer Price Index and tend to watch it by tracking the retail sales numbers which are the best indicator of how consumers are behaving. And, what we’re seeing, is pent up demand for motor vehicles starting to influence the broader market.
We have now received the sales figures for April and they were up in eight provinces. This in the face of rising interest rates pushing up housing costs, something that is not discretionary so when the cost of rent or a mortgage rises, we have to cut somewhere else.
And you can see hints of that transition in the big cities – Toronto and Vancouver – where housing costs are highest. Retail spending is down compared a year earlier suggesting some shifting from consumer spending to expenditures on shelter. But for the month of April alone, the numbers were up in both cities, largely because of sales traffic at auto dealerships, a signal that interest rates hikes may not be done just yet.
