Spring Surge: Consumer Spending Rises Despite Uncertainty
Index of Consumer Spending
In April 2025, the Index of Consumer Spending rose to 113.3—an increase of 8.5 points from March (April 2022 = 100).
- In April 2025, the Index of Consumer Spending (ICS) increased for all provinces. Leading the pack was Saskatchewan with a gain of 14.0 points, followed by Manitoba (12.5 points) and Prince Edward Island (11.5 points). The third prairie province—Alberta—also posted strong ICS growth of 6.2 points. The Northwest Territories and Nunavut recorded the only ICS drops, with declines of -5.3 and -6.6 points, respectively.
- Consumer spending has steadily improved each year since 2022 (April 2022=100). In 2023, the ICS grew by 8.5 points, to 108.5, improved to 112.4 points in 2024, and stood at 113.3 points in April 2025.
- Canada’s unemployment rate was 6.9 per cent in April—0.8 percentage points higher year-over-year. The higher unemployment rate did not translate to slower consumer spending as Canada’s population growth added more consumers to the economy. Statistics Canada estimates that Canada’s population increased by over 740,000 in 2024, or by 1.8 per cent.
- Quarterly population estimates from Statistics Canada show that Saskatchewan (+0.34 per cent) and Manitoba (+0.27 per cent) had the second and third fastest population growth, only behind Alberta (+0.58 per cent). The stronger population growth in the Prairies contributed to these provinces’ higher ICS levels.
- Consumer spending naturally follows seasonal trends. As the weather improves, consumers become more active in the retail economy, typically spending more during the spring and summer months. Another seasonal factor contributing to growth in consumer spending, especially in the Prairie provinces, is the arrival of temporary foreign workers. These workers disproportionately work in agriculture and, because of the sector’s seasonality, most workers arrive in Canada during the spring and summer months. With Canada entering the spring season, these incoming workers represent additional consumers in the economy.
- Consumer confidence moderately improved from March to April 2025, rising by 4.2 points to 48.4. While consumers’ confidence regarding their current finances worsened, their outlook about their future finances and job prospects improved. An improved outlook, here, suggests a greater appetite for purchases made on credit. A boost in this type of purchasing would contribute to higher consumer spending.
- Inflation fell to 1.7 per cent in April, a notably slower pace than the 2.3 per cent recorded in March. Increased oil supply from OPEC+ countries and removal of the consumer carbon tax each played a significant role in lower energy prices in April (18.1 per cent lower year-over-year). Meanwhile, food prices increased by 3.2 per cent in March and 3.8 per cent in April.
- Economic uncertainty remains elevated and will shape consumers’ spending choices in the near term. Although Canada was spared from the higher tariffs the White House initially announced, the ongoing trade war has fogged the timeline for further rate cuts by the Bank of Canada. While we anticipate one more rate cut in the third quarter of 2025, elevated uncertainty risks delaying this cut and keeping borrowing costs higher for longer.
Economic uncertainty remains elevated and will shape consumers’ spending choices in the near term.
Powered by Moneris Data Services
The Index of Consumer Spending is powered by exclusive consumer transaction data provided by Moneris Data Services. Moneris is Canada’s number one payment processor with over 3.5 billion transactions spanning more than 325,000 merchant locations. Our index tracks incremental changes in net transaction volume month-over-month from a set starting point (April 2022 = 100), enabling us to gauge economic activity levels across the country and provide insights into how the Canadian economy is performing coast to coast.
Updates on this index will be released monthly.
The Index of Consumer Spending’s (ICS) methodology has been revised for releases from January 2024 onwards. The ICS no longer tracks the weekly year-on-year changes in consumer spending. Instead, the ICS now tracks the incremental changes in net transaction volume month-over-month, from a set starting point (April 2022 = 100).
Disclaimer: Forecasts and research often involve numerous assumptions and data sources and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice.