Canadian Consumers' Momentum Faces Renewed Trade Test in Second Half of 2026, BMO Says

06:44 AM EDT, 08/25/2026 (MT Newswires) -- Canadian consumers enter the second half of 2026 with some momentum, but renewed trade tensions with the US could put that resilience to the test, according to BMO Capital Markets in a note. Per-capita spending has risen for two quarters, while retail volumes increased for a second month in June. Alongside firm manufacturing and wholesale activity, this suggests a solid second quarter, with real gross domestic product likely to exceed Statistics Canada's 0.2% monthly gain in the June flash estimate, said the bank. "The bigger question is what happens in July," wrote BMO Senior Economist Shelly Kaushik in Monday's note. July's retail and manufacturing flash estimates pointed to modest declines, while higher prices suggest real volumes may weaken further. However, just as consumers and businesses began looking past US tariff uncertainty, the trade war reignited in July, added the bank's economist. New duties and the threat of further measures could weigh on spending and investment, putting the first half's momentum to the test in the last six months of 2026.