Andrew Grantham, senior economist at CIBC, framed the retail rebound as a sign that monetary easing has\u00a0begun to filter through.<\/p>\n
\u201cA solid start to the year for retail sales could be evidence that last year’s interest rate cuts, combined with the slight reduction in unemployment since mid-2025, is supporting an upturn in consumer sentiment and spending,\u201d he said.<\/p>\n
Mortgage renewals and household budgets<\/p>\n
Michael Davenport, senior Canada economist at Oxford Economics, the latest data point\u00a0to a firmer\u2011than\u2011expected start to the year. But he warned that \u201ca shrinking population, deteriorating labour market, and more mortgage renewals at higher interest rates will likely keep consumer outlays subdued in the near term.\u201d<\/p>\n
Davenport also said the energy price shock tied to the US\/Israel-Iran war\u00a0would squeeze households this spring, even if some temporarily drew down savings to maintain spending. He pointed to the coming federal grocery and essentials benefit as a modest buffer for real incomes in the second quarter.<\/p>\n
Tailwind for GDP, mixed signal for housing<\/p>\n