The Canadian economy has seen some pivotal shifts in 2023. The year started off with inflation at multi-decade highs, widespread labour shortages, and exceptionally strong consumer spending. The economy was very obviously overheating, and “recession” was more of a buzzword than a reality. Fast-forward to December and the macro data is looking considerably softer, in-line with a mild recession. Join RBC Economists Claire Fan and Carrie Freestone in this final episode of the season where they provide a recap of key macro themes that played out this year and tell you what to look out for in the year ahead.

Many indicators these days are pointing to deteriorations in labour market conditions in Canada. Job vacancies are down, job searching time have lengthened. The unemployment rate is still low but has increased by 0.7% over the span of 6 months.

Clouding the outlook for the Canadian jobs market is also the slowdown in consumer demand, especially for discretionary services industries where staffing levels never fully recovered to pre-pandemic to begin with. Outright layoffs to-date are still limited. But record level of household indebtedness these days also means that job losses, when they come, could hurt much more than they used to.

In this week's episode of the 10-Minute Take, economists Carrie Freestone and Claire Fan look at the latest Canadian labour market data. They’ll discuss what’s behind the ongoing deterioration, and what to expect moving forward.

This past decade, Canada's population growth outpaced India, China, and South and Central America, surpassing the global average. In recent years, Canada's soaring population growth has been entirely fueled by immigration. Canada relies heavily on newcomers to fill jobs left vacant by retiring Baby Boomers. But rising need for housing is adding to pre-existing housing affordability concerns. In this week's episode of the 10-Minute Take, economists Carrie Freestone and Claire Fan will unpack the latest federal immigration targets, and discuss how rising immigration has impacted the Canadian economy.

High inflation and even higher interest rates are turning up the heat for Canadians, making it increasingly challenging for consumers and businesses to pay off existing debt, to spend or to invest.

Indeed, the latest Bank of Canada surveys revealed that almost 60% of consumers had to cut spending in Q3 as they contended with elevated prices and debt-servicing expenses. Echoing that was a slowing in demand reported by businesses, some of whom even flagged an outright decline in sales over the past year. The silver lining? Slower demand is lowering inflation pressures, making it less likely for prices to have to go up as large or as frequently moving forward.

Tune in to this week’s episode of the 10-Minute Take as RBC economists Carrie Freestone and Claire Fan walk you through the latest quarterly Bank of Canada surveys, and unpack what it all means for BoC rate decisions moving forward.

U.S GDP growth continues to soar while activity cools off in Canada. Canadians have tightened their belts, prioritizing the purchase of essentials over discretionary goods. In the U.S., consumers are still spending at a record pace and momentum has yet to fade. But will the U.S. continue to outperform Canada? We don’t think so! Tune in to this week’s episode of the 10-Minute Take as RBC economists Carrie Freestone and Claire Fan unpack what’s driving U.S. resilience and why it won’t last.

High inflation has prompted many workers to push for wage increases, and unions are responding by pressuring employers to pony up. Canada has witnessed a drastic surge in labour stoppages- or strikes- in recent months. There’s still a gap to close - wage increases for unionized workers since early 2020 lag those of non-unionized workers by about 7%. But will this mean sustained pressure on wage growth in the future? On this episode, we are joined by RBC Economist Rachel Battaglia to discuss what’s driving the higher frequency of wage disputes and the importance of taming inflation in order to mitigate these disruptions.

While Americans are still spending, Canadians are tightening their belts. And the U.S. economy continues to surge while Canada's shows early signs of weakness. Why? Debt levels and faster refinancing! In this episode of the 10-Minute Take, RBC economists Claire Fan and Carrie Freestone explain how debt impacts Canadian consumer behaviour, which age cohorts are most impacted--and just how worried we should be about it all. Tune in!

Western countries are still grappling with decade-high interest rates and elevated inflation. But in China, prices fell on a year over year basis in July. And amid softer consumer demand and a wobbly real estate market, the Chinese central bank has taken the opposite measure to its Western counterparts: cutting key lending rates.

Just how bad could things get in China? In this episode of the 10-Minute Take, RBC economists Carrie Freestone and Claire Fan break down what's happening and what it might mean for the rest of the world. We explore the slew of data coming out of the country, add some important context on demographic trends before bringing the conversation back to Canada.

Western central banks don't want to push interest rates higher…but they will if they need to. So how effective have rate hikes actually been? The latest data offers conflicting signals: unemployment is up but inflation remains above target—and consumer spending is still strong. In this episode, RBC economists Claire Fan and Carrie Freestone examine this burning question, assess the likelihood of a “soft landing” (and explain what that is).

If you have a four-legged friend at home, that makes you part of the pet economy!

Today the global pet industry stands at over $250 billion USD and is over twice the size of the global film industry. Part of the boom can be traced back to the pandemic, when households’ time spent at home rose substantially, along with their need for companionship - the US alone added 5 million pets from 2019 to 2022. The outlook for the pet sector however is less positive, as interest rate hikes take purchasing power out of households’ hands, lowering spending on all things including pet-related products and services.

Join RBC Economics Carrie Freestone and Claire Fan in this week’s episode of the Ten Minute Take, where they take a closer look at the pet economy, how much it’s grown and where it’s headed.