Core retail sales spending in Canada rose by 0.4% in August. However, the overall headline figure fell by 2.2% due to a decrease in gasoline prices, which affected the final result.<\/p>\n
There were increases in spending on clothing and the ‘arts and entertainment’ categories, whereas spending in ‘household and construction’ saw a slight decline. Spending at grocery stores has remained unchanged since May.<\/p>\n
An economist at RBC noted that the rise in core sales aligns with Canada’s broader economic outlook. Although there was a GDP decline in Q2, there is an expectation of a slow, positive growth, with consumer spending helping to counterbalance challenges in the industrial sector.<\/p>\n
The latest cardholder data for August 2025 suggests the Canadian consumer is more resilient than headline numbers show. While a drop in gas prices pulled the main figure down, core spending on items like clothing and entertainment actually increased. This underlying strength points to a surprisingly robust economy.<\/p>\n
This resilience comes after we saw a slight contraction in the second quarter GDP figures, so this positive consumer activity could delay any rate cuts from the Bank of Canada. The latest report from Statistics Canada showed core inflation remains sticky at 2.8%, well above the central bank\u2019s target. Given the Bank\u2019s data-dependent stance from its September 10th meeting, this strong spending data makes a hawkish hold more likely.<\/p>\n
For derivatives traders, this points to renewed strength in the Canadian dollar. We should consider long positions on the loonie, perhaps through call options on CAD\/USD, as the currency shows strength even with WTI crude prices trading below $80 a barrel. The market may be underpricing the resilience of the Canadian economy.<\/p>\n
We saw a similar pattern in late 2023, where a strong consumer base helped the economy avoid a widely anticipated recession and kept the Bank of Canada on alert. That period ultimately supported the loonie against its peers. History suggests that betting against the Canadian consumer has been a losing trade in these situations.<\/p>\n
This spending breakdown also offers opportunities in equity derivatives. The acceleration in arts and entertainment spending suggests strength in consumer discretionary sectors, making call options on related ETFs attractive. Conversely, the softening in household and construction spending could warrant looking at protective put strategies on housing-related equities.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Core retail sales rose 0.4% in August, despite a 2.2% headline drop from falling gasoline prices.<\/p>\n","protected":false},"author":62,"featured_media":16959,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-30879","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/30879","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=30879"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/30879\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16959"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=30879"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=30879"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=30879"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}