After the Bank of Canada hiked its key policy rate to 4.75% in June, spending started to dip, the Chamber says
Consumer spending is expected to cool in the third quarter as interest rate hikes continue to work their way through the economy, experts said.
Consumer spending will likely slow noticeably in the second half of the year as people cut back on discretionary purchases, said Tapp. Canadians prioritized spending on discretionary services over goods in the second quarter, research from RBC Economics found. "So I think that eventually that will spill over into the services sector. We just haven't seen it yet."
"That's the sort of balancing act they're trying to make, where they want to slow the economy so that supply can catch up to demand, but they don't want to slow it so much that we have people losing their jobs and we have an actual broader recession," he said. "Overall, the economy is still moving along at a fair pace. But for the average person, the average consumer, they may not be feeling like it's a great time right now, even if it's not necessarily measured as a recession," he said.
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