Gasoline Prices to Hit Canada's Consumers, Says BMO
Canadian consumers have been hanging on, spending their way through significant headwinds, including economic uncertainty and outright population decline, said Bank of Montreal (BMO).Unfortunately, the most recent shock -- in the form of higher energy prices -- will prove a tougher challenge, noted the bank.The March retail sales report showed headline spending rose 0.9% in the month, but that was entirely due to higher gasoline prices. Sales volumes fell 0.7% month over month, although earlier strength still leaves real spending up in Q1.Indeed, real spending stepped up "meaningfully" in per capita terms, stated BMO."Unfortunately," the softness in March looks to continue as prices remained elevated -- gasoline increased again, by almost 10% in April alone, pointed out the bank.The flash estimate for April points to a modest increase, but volumes could potentially decline for the second straight month, added BMO.While it's been an impressive showing for Canadian consumers so far, the spike in prices is leaving a mark. Ultimately, spending looks to remain under pressure until energy prices "normalize," according to the bank.