06:18 AM EDT, 10/10/2025 (MT Newswires) -- Canadian households are valiantly trying to prop up the economy in the trade war with the United States, partly by redirecting some travel funds domestically, said Bank of Montreal (BMO).

However, one concern is that much of the strength is being led by upper-income households, who, in turn, are being pumped by the wealth effect from a rollicking equity rally that may or may not continue, noted the bank.

Allaying this concern somewhat is that nominal spending in the year to Q2 was robust across all five income quintiles, stated BMO. While the lowest income group didn't increase spending as much as the top one -- by 6.9% versus 8.8% -- the pace was still strong.

In fact, even this group benefited from newfound financial wealth, along with decent income growth, added the bank.

"Alas," the latter could be at risk due to the recent weakness in labor markets, pointed out BMO.