Household credit for Canada measures total outstanding debt owed by individuals and families, including mortgages, consumer loans, and credit cards. It is the primary driver of consumer spending power relative to income.
Why FX traders watch it
High household debt makes consumers more sensitive to interest rate changes, amplifying the impact of Bank of Canada rate decisions on the economy. Rate hikes reduce disposable income for debt-laden households, cooling consumption.
How to interpret the data
Rapid household credit growth signals strong consumer demand but also rising leverage that could amplify a future downturn. A sharp deceleration in household credit typically precedes declining consumer spending.