Canada's Markets March On Despite Cooling Economy

The global economy is experiencing a boost due to tech spending, fiscal stimulus, and manufacturing growth. However, this growth is not evenly distributed among all consumers.

According to Purpose Investments' Chief Market Strategist Craig Basinger, the wealthy consumer has historically had a greater economic impact than lower-income individuals. As such, it's essential to monitor high-end consumer spending.

The data on higher-end consumer spending remains decent, with same-store-sales or overall sales showing a year-over-year increase in cosmetic, sit-down restaurant, and luxury brand categories. However, this is quarterly data from earnings, which may not provide the complete picture.

When combining these slower high-end consumer measurements with card spending data on more discretionary categories, there appears to be a decline in spending. This could be attributed to rising energy prices.

In Canada, retail sales have flatlined since early 2025, and even more discretionary categories have seen no growth. However, employment has shown an uptick, which may help boost consumer spending.

Canada's GDP has been negative for two consecutive quarters, but Purpose Investments doesn't consider this a recession. The decline in GDP was largely due to trade and inventory volatility.