Consumer spending in Canada has continued to show signs of weakness over the past two months, according to fresh data from the country’s two largest banks.

Toronto-Dominion Bank and Royal Bank of Canada use their proprietary credit and debit card data to estimate retail sales growth in Canada. TD’s data, released Tuesday, show March sales jumping 0.8 per cent before dropping 0.9 per cent in April. RBC’s figures arrive at roughly the same conclusion for the two-month period, via a different path: the bank says spending by its customers dropped in March, then rebounded last month.

After combining March and April growth rates, TD’s figures point to a 0.1 per cent decrease in sales over the two-month period, while RBC’s show a 0.2 per cent decline, according to Bloomberg calculations.

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Retail sales hit an all-time high of $66.9 billion (US$49 billion) in December before falling in both January and February, according to the latest final data from Statistics Canada. The two banks’ estimates suggest that this period of softer sales for retailers has extended. 

Retail spending per person has been falling for almost two years, but a big wave of newcomers helped keep overall sales growing until recently. That support may soon be gone, considering population growth fell by about half in the first quarter of 2024 from the previous quarter, and Prime Minister Justin Trudeau’s government plans to slash the numbers of temporary residents and international students. 

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TD and RBC are the only two of Canada’s big five banks that have recently published consumer spending trackers. The TD tracker has broadly matched Statistics Canada’s retail data on a yearly basis. 

Combined, debit and credit cards accounted for 92 per cent of the value of point-of-sale transactions in 2022, according to a Payments Canada report from last fall.

A softer retail print would help bolster the case for the Bank of Canada to cut rates at its next meeting on June 5. First, the central bank will be closely watching inflation data, which will be released May 21. Stronger-than-expected jobs numbers last week prompted traders to pare odds of a June cut to less than 50 per cent, from about two-thirds previously.