The economy is slowing. Rising interest rates and stubbornly high inflation are squeezing indebted households. And just about every forecast is warning that a recession is looming.
But there is one bright spot — one place where the flashing red lights are shrugged off by an army of consumers perfectly content to spend generously: Taylor Swift’s Eras Tour.
“Taylor Swift is a real representative, along with the Eras Tour, of the huge consumer spending power that still exists out there,” economist Brett House said.
The professor of professional practice in economics at Columbia Business School in New York, who was previously deputy chief economist at Scotiabank, said that during the COVID-19 pandemic, consumers renovated their homes, spruced up their backyards and gobbled up electronic gadgets. Now, he says, what they crave are experiences.
“I’d say this isn’t just about Taylor Swift. This is about the importance of place and being together after a period when we couldn’t do so.”
House and his niece were able to get coveted floor seats to Swift’s recent concert in Detroit. He saw with his own eyes how the performer has tapped into a cultural moment.
“People want to be together, it’s meaningful to hear music and be in one place for that experience,” House said. “And people are willing to invest in it.”
Swift tour forecast to have $5B impact
And investing they are.
Cassie Leonhardt travelled from her home in Vancouver to Arizona for the opening night of the tour. She spent $980 on a flight, her hotel cost $590, and her ticket ran her another $550.
She also bought tickets to Swift’s Seattle concert, which cost $1,150. She had her eye on more expensive tickets closer to the front, but she just didn’t have the cash.
“If I had the capital do it, I probably would drop $6,000,” Leonhardt told CBC News. “To have a front-row ticket, it’s worth it 100 per cent for me.”
All that spending adds up.
And it’s not just the stadium, the promoter or even the artist that are cashing in. Leonhardt says she saw crowds of fellow Swifties at the airport and in the hotel lobby looking for local transportation and a place to eat.
The online research group QuestionPro crunched the numbers and found the Eras Tour will generate billions of dollars in economic activity in the United States.
Swift performs at Nissan Stadium in Nashville on May 5. The online research group QuestionPro estimates the Eras Tour will generate billions in economic activity in the U.S. (George Walker IV/The Associated Press)
“If the current spending pace continues through the end of the tour, the Eras Tour will have generated an estimated $5 billion [US] in economic impact, more than the gross domestic product of 50 countries,” QuestionPro wrote in a news release.
As the tour swept through Las Vegas and Chicago, boards of trade in both cities heralded the economic impact on the hotel industry.
Occupancy rates in Chicago reached 96.8 per cent when Swift played three shows this month. A two-night run through Las Vegas helped push tourism numbers in that city to levels not seen since the pandemic.
Consumers spend as economy slows
That resilience in consumer spending is good for local businesses. But it worries policy-makers.
Central banks around the world have been aggressively hiking interest rates over the past year with the express purpose of slowing spending.
The theory is that as borrowing costs rise, consumers would be less likely to spend on something as decidedly discretionary as concert tickets.
But policy-makers have been consistently surprised by consumers’ willingness to spend even as disposable incomes fall and the economy slows.
Shoppers are shown at Toronto’s Eaton Centre. Policy-makers say they’re surprised that consumers are willing to spend even as disposable incomes fall and the economy slows. (Cole Burston/The Canadian Press)
“Despite all this, we’ve been surprised about the people [who] are going out and buying still a lot of things,” Bank of Canada deputy governor Paul Beaudry said in a speech on June 8, the day after the central bank hiked its benchmark interest rate again. “The surprising part is actually that strength among the consumers.”
That consumer strength is on permanent display as all those Swifties flock to city after city, bidding up the cost of tickets, hotel rooms and everything else along the way.
Some say Swift and other big acts, like Beyoncé’s Renaissance World Tour, are actively feeding into the inflation problem that central bankers are trying to fix.
But economists have long debated whether one-off events like this or major sports matches influence inflation in the same way that broad-based price increases do.
Manulife Investment Management chief economist Frances Donald, a noted Swift fan, says the biggest factor here is that the singer has tapped into a moment that is fleeting.
“Taylor Swift has perfectly timed her concerts to a period where peak consumer spending and peak employment rates are really a substantial qualifier of our current economy. Six months from now, we likely aren’t going to see tours of this magnitude,” Donald said.
Is a recession needed to cool Canada’s economy? | About That
The Bank of Canada’s decision to raise its key interest rate to its highest level in 22 years sent a clear message: the economy is still too hot. It’s led some experts to wonder if a recession is needed to cool down the economy. Lauren Bird speaks to CBC’s Peter Armstrong about what to expect.
Timing is everything
That keen sense of timing isn’t just a fluke. Swift has carved out a reputation as a smart and canny business manager.
When the rights to her earlier recordings were sold, she promptly began re-recording her albums so she would own exclusive rights over the music and publishing.
Swift and her fans took on Ticketmaster and ticket resellers over so-called junk fees. This week, Live Nation (which owns Ticketmaster) agreed to a more transparent process of billing customers.
“She has been a very savvy businessperson,” economist Brett House said.
Brett House, a professor at Columbia Business School and a former deputy chief economist at Scotiabank, says during the COVID-19 pandemic, consumers renovated their homes and purchased electronic gadgets. Now, he says, what they crave are experiences. (Laura MacNaughton/CBC)
He says while much of the success of the Eras Tour can be chalked up to timing, there’s more at play here than just that.
“I don’t think we should discount how much of this is a real tip of the cap to Taylor Swift for being a very effective businessperson,” he said.
Meanwhile, the economy is already showing signs of weakness. Even the kinds of consumer spending that marked the beginning of the Eras Tour is beginning to slow.
When she bought her tickets, Cassie Leonhardt was confident about her finances and her place in the economy. Now she says she’s glad she got her tickets before things slowed too much.
“I don’t regret it,” she said. “But at the same time, I think, in hindsight, knowing where we’re at economically now, I might have just maybe opted for one date [instead of multiple shows].”
But for now, she and countless other fans are paying what they can to be a part of a moment — a moment they see as priceless.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
