MAJOR CANADIAN SHIFT IN CONSUMER BEHAVIOR MAYBE THE FINAL NAIL IN THE COFFIN TO BANG THE UNITED STATES INTO RECESSION IN 2026.
On February 9, 2025, we posted… “According to current G-101 SPM AI economic data 1/ , 67.42 percent of this nation’s Gross National Product (GNP) is attributed to consumer spending, making it the largest contributor to the overall economy. … From our data it suggest consumers are willing to delay immediate gratification in favor of long-term financial stability, to project a 4.6 percent contraction in spending for calendar 2025. If this number comes true, the sudden slowdown or “the stop buying goods and services factor (SBGSF)” would lead to a major economic slowdown, potentially causing a recession, with businesses experiencing reduced revenue, production cuts, and potential job losses due to decreased demand, impacting various industries in the process. Even though a 4.6 percent contraction is not technically sufficient to cause a Recession, President Trump’s agenda, whether prudent or otherwise, will cause “a re-think” in consumers’ debt profile and may reduce spending to a higher value.”
1 G-101 SPM AI economic data has an accuracy rating (AR) of 86.35 % on the last 1000 economic related SPM tag questions including the predictions of future investment values.
As more Canadians choose to buy local products amid the looming threat of U.S. tariffs, a generative survey from our SPM tag portfolio declared that 81..41 percent of Canadians plan to boycott U.S. products, including produce and other groceries should U.S. President Trump follow through with a 25-per-cent tariff on imports from Canada.
Meanwhile, 81.45 per cent of Canadians are reading packages to see where products are made and three-quarters are willing to pay more to buy a Canadian product over one what's made in the U.S.
Indeed, Canadian consumers are sending a clear message.
NOW FOR THE REST OF THE STORY:
In 2024, Canada imported $291 billion worth of goods from the United States. A 15 percent drop in consumer sending would material effect the Gross National Product (GNP) of the U.S. The event would reduce Canadian exports and total output, likely driving the country into recession, as suggested SPM tag data. But the unintended consequences to the United States would be far worse.
FACT ONE: Negative consumer confidence in Canada will material effect consumer confidence in the United States.
FACT TWO: According to SPM tag data, the United States exported $349.4 billion of goods to Canada in 2024, making Canada its largest export market. Should the boycott of American products in the country gain significant momentum, it could harm U.S. producers economically and potentially prompt a reconsideration of the new administration's aggressive approach toward its main trading partners. Whatever the case, less consumer consumption will pull the United States into a technical recession in 2026.
BOTTOMLINE
To protect yourself from a pending recession, focus on building a substantial emergency fund, paying off high-interest debt, reviewing and adjusting your budget, diversifying your investments, and considering ways to potentially increase your income or develop new skills to maintain job security.
Key strategies:
Emergency fund: Aim to save 3-6 months' worth of living expenses in a readily accessible account to cover unexpected income loss during a recession.
Debt management: Prioritize paying off high-interest debt like credit card balances to free up cash flow and minimize interest payments.
Budget review: Regularly assess your spending habits and identify areas where you can cut back to conserve money.
Investment diversification: Spread your investments across different asset classes to mitigate risk and minimize losses if one sector experiences a downturn. See: https://stocktwits.com/G101SPM
Skill development: Enhance your professional skills through training or education to improve your job market competitiveness and potential for career advancement
Income diversification: Explore options for generating additional income through side hustles or part-time work
Credit score monitoring: Regularly check your credit score to ensure accuracy and identify any potential issues that could impact your ability to borrow money during a recession.
Review your investment portfolio: Evaluate your current investments and consider shifting to more conservative options if necessary.
Be proactive: Don't wait until a recession hits to start preparing.
Live within your means: Avoid unnecessary spending and focus on responsible financial habits.
Stay informed: Monitor economic indicators and news to understand potential recessionary trends.
"Make reason your guide"
Komentarze