The Canadian economy has been through a whirlwind in 2024. Canada has been in an extended period of underperforming per capita growth compared to the United States since 2019. Still, 2024 was a pivotal year for Canadians with inflation coming down and interest rates finally moving lower. But has inflation truly been tamed? If so, why doesn't it "feel" like affordability has truly gotten better? And, how do big policy pivots on immigration and global trade fit into it all? Join RBC economists Carrie Freestone and Claire Fan in this 2024 10-Minute Take wrap-up episode. They'll discuss the highlights in a year-in-review before addressing key themes for 2025 in the final episode of the season.

The U.S. government deficit is unusually large at 6.4% of gross domestic product in 2024—the average over the last five decades is 3.7%. Promises from the new Trump administration on the campaign trail suggest it is likely to grow even bigger over the next four years. Massive fiscal spending has been fueling U.S. growth, but will have important and, ultimately, costly consequences for the economy. Lower corporate taxes could also hurt Canada’s competitiveness, at a time when the economic divergence with the U.S. is already large. In this 10-Minute Take, RBC economists Claire Fan and Carrie Freestone dive into the growing government deficit in the U.S., and its ripple effects on Canada.

Canadian household balance sheets appear exceptionally strong as disposable income continues to rise alongside savings. But, what the latest economic data tells us is distinctly different from how many households are feeling. There are many signs the average Canadian consumer is suffering. How can both be true at the same time? On this episode of the 10-Minute Take, RBC economists Carrie Freestone and Claire Fan discuss this paradox of some Canadians falling behind on credit card payments, while others see savings rise. We’ll unpack the different realities experienced by various income groups, focusing on spending behaviours, debt accumulation or savings, and the distinct difference between wage growth and changes in disposable income.

The Bank of Canada cut the overnight rate by 50 basis points in October—marking the largest reduction since the pandemic. A day later, the federal government announced new immigration targets for the next three years that would drastically alter population growth in Canada. Both of these moves will have an impact on the Canadian economy. On this episode of the 10-Minute Take, RBC economists Claire Fan and Carrie Freestone discuss the latest rate cut, why it was bigger than before and what to expect from the BoC going forward. They’ll also tackle how immigration targets fit into it all.

With many Canadian households planning to renew longer-term fixed rate mortgages at higher rates into 2025 and 2026, Canada’s “mortgage renewal cliff” is hardly behind us. Higher mortgage payments mean less money leftover to spend on essentials and non-essentials and on balance, a weaker economic outlook. But we don't think this is a huge risk, as long as interest rates continue to drop and labour markets don't plummet. Join RBC Economists Carrie Freestone and Claire Fan to discuss the upcoming wave of mortgage renewals, how it impacts the overall economy, and why we think the worst of the mortgage renewal cliff is behind us.

Headline inflation in Canada dropped to the 2% target set by the Bank of Canada for the first time since the pandemic in August. That means higher interest rates implemented by the central bank since 2022 have worked to reduce price pressures and restore balance back in the economy. But as much as that is good news, a closer look at the data shows today’s 2% inflation is not quite the same as 2% inflation from before the pandemic. On this episode of the 10-Minute Take, RBC economists Claire Fan and Carrie Freestone discuss the latest inflation trends in Canada and how and why it’s different from before and what this means for the economy going forward.

The U.S. Federal Reserve cut the federal funds rate for the first time since the pandemic in September by 50 basis points. The easing of monetary policy was highly anticipated with inflation showing further signs of deceleration and a very gradual, but worrying, rise in unemployment. Still, many were expecting a 25 basis point cut, because overall economic output remains strong–propped up by robust consumer activity. On this episode of the 10-Minute Take, join RBC Economists Claire Fan and Carrie Freestone and special guest, RBC Chief Economist Frances Donald, as they unpack the Fed's latest interest rate decision and what red or green flags are emerging from U.S. economic data.

The Liberal government recently announced new tariffs on electric vehicles, steel and aluminum imports from China—marking the latest move in the global trend of trade segregation to boost domestic priorities. That’s not the end of it - by the end of the ongoing 30-day government consultation, tariffs could also be imposed on other products including solar cells, EV batteries, chips, and critical minerals. These new measures are aimed to shield domestic producers from unfair international competition, but will also lead to an immediate increase in input costs for Canadian importers, while creating more tension amid an already frigid global trade environment.

Both U.S. and Canadian households are facing recession fears- but for different reasons. Downside surprises to U.S. data in early August triggered a massive equity selloff. And a triggering of the “Sahm rule” in the U.S. was met with recession fears. In Canada, households are feeling stretched and job seekers struggle to find work. Despite not being in a recession, it certainly feels like one. How will Central Banks react and when will things start to feel easier for Canadian households? In this episode of the 10-minute take, join RBC Economists Claire Fan and Carrie Freestone for a macro update as they answer your burning questions around the latest data points, recession fears, and what all of this means for the year ahead.

Younger Canadians are bearing the brunt of the softening labour market, accounting for the lion’s share— 80%—of the increase in Canada's unemployment rate since the summer of 2022. That share is much higher than in previous downturns like the global financial crisis. Not having a job results in a big hit to disposable income. That coupled with surging costs to service mortgages and other debt has forced many younger Canadian households to deleverage. Some of these challenges are set to unwind in the year ahead, as inflation eases and interest rates drop lower. Other issues, including limited access to the housing market could have a longer-lasting impact on young Canadians' lives. In this week’s episode of the 10-Minute Take, join RBC economists Claire Fan and Carrie Freestone as they take a deep dive into the challenges facing young Canadians.

The recent deterioration of the Canadian labour market comes at a time when immigration and population growth have also increased significantly. Many have put the two together, and attributed rising unemployment solely to the increase in the labour force due to newcomers. On that, we have a different view. It is true that landed immigrants are seeing a faster increase in the unemployment rate, but that’s been the case whenever the economy has softened in previous periods. This time around, the bigger deterioration was seen among students and new graduates who are having an increasingly hard time landing a job as demand for labour continues to pull back. In this week’s episode of the 10-Minute Take, RBC economists Claire Fan and Carrie Freestone unpack trends in the labour market, starting with how immigration fits into it all. They’ll then discuss which age groups and industries have been hit particularly hard, before finishing up with what to expect going forward.