The 10-Minute Take

Canada's largest public sector strike in decades just ended—with a deal that includes double-digit wage hikes. Will negotiated wage settlements like these undermine the Bank of Canada’s efforts to cool inflation? RBC economists Carrie Freestone and Claire Fan discuss this and other issues on this episode of the 10 Minute Take.

Will higher wages arising from labour disputes fire up inflation?

“Allow us to introduce ourselves!” In this episode of the 10 Minute Take, get to know RBC economists Carrie Freestone and Claire Fan. Spend a day in the life of an economist and get our latest hot takes on the macro outlook. What's changed since RBC’s initial recession call last summer? Are signs of weakness emerging? And finally, what do we lie awake thinking about?

What keeps economists up at night?

Anxious to scratch your travel itch this summer but worried about disruptions and high prices? You’re not alone! In this week’s episode of the 10 Minute Take podcast, RBC economists Carrie Freestone and Claire Fan break down this year's travel trends for you. We start with what drove the chaos last summer, before moving on to chat about some interesting trends we’ve uncovered. As it turns out, despite resilient demand, Canadians have already made subtle changes to their travel choices to combat rising prices. Finally, we’ll chat about the outlook for travel in an increasingly challenging economic environment, and why we expect things to slow but not crash.

What will this year's summer travel season look like?

The Bank of Canada put the brakes on its record rate hiking cycle in January. Five months later, it sprang back into action—surprising much of Bay Street with a 25 basis point increase. What drove the decision and how much higher will rates rise? More important: how will this impact Canadians? Join RBC Economists Claire Fan and Carrie Freestone on this week’s episode of the 10-Minute Take.

Interest rates are rising again?

If you’re wondering whether your grocery bills will ever turn out less scary than they are now, we have bad news for you. Food inflation peaked in Canada just this past January. But slowing inflation does not mean lower prices, it merely means prices will climb at a slower rate. What’s causing prices for food to stay high? And moving forward, what are some of the challenges that will continue to put pressure on food prices in the next decade? Join RBC Economists Claire Fan and Carrie Freestone on this episode of the Ten Minute Take, as they dig into food inflation, and answer questions about your grocery bills.

Will my grocery bills ever get lower?

The most aggressive monetary tightening cycle since the 1990s has sent interest rates soaring. Yet Canadians keep on spending. Why and will they keep it up? In this week’s episode of the 10-Minute Take, RBC Economists Claire Fan and Carrie Freestone explain why spending will slow but won’t outright decline.

Why aren’t rising rates cooling Canadian spending?

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.

Will the pandemic pet economy boom last?

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).

Are the Bank of Canada's interest rate hikes working?

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.

When China sneezes, do we all catch a cold?

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!

How indebted are Canadians and is it a problem?

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.

Why are so many workers on strike these days?

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.

How long can the U.S. economy’s outperformance last?

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.

How badly are Canadian businesses and consumers wounded by high interest rates?

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.

How has soaring immigration impacted economic growth in Canada?

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.

What's going on in the Canadian jobs market?

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.

What surprised economists in 2023?

It’s a new year and the Bank of Canada (BoC)'s overnight rate is currently sitting at its highest level in over two decades. Canadians facing higher borrowing costs are eager to see the BoC come to the rescue by changing course with interest rate cuts. But is the economic data soft enough for the BoC to pivot? On this episode of the 10-Minute Take, RBC economists Carrie Freestone and Claire Fan unpack their views on when rate cuts will happen and what the trajectory will look like.

When are interest rate cuts coming?

Just a couple of weeks into the new year and the economic landscape is full of surprises. Data on Canadian inflation again showed just how "sticky" domestic price pressures can be. Globally, supply chains are again being challenged, with attacks in the Red Sea disrupting container shipments. And finally, Canadian labour markets have been slowing for months. But unlike prior downturns, layoffs have actually been relatively limited and it's longer job searches for students and new graduates that are bearing the brunt instead.

On this episode of the 10-Minute Take, join RBC economists Carrie Freestone and Claire Fan as they walk through three key trends that already jumped out as surprises in 2024.

Surprises in 2024, already?

In 2023, Canadian households faced higher debt-servicing costs on mortgages and consumer credit as well as higher rents. Canadians had to tighten their belts and in many cases, forgo savings. Will 2024 look different? What will drive the slow rebound in the back half of the year? Join RBC Economists Claire Fan and Carrie Freestone as they unpack consumer trends and explain why the back half of this year will look different.

What will drive growth in the back half of 2024?

Over the past few years, Canada’s population growth has eclipsed the global average. International students accounted for about 20% of the recent population surge. The immense growth has ignited concerns about housing availability and affordability. On this episode of the 10-Minute Take, we welcome back RBC Economist Rachel Battaglia, who will unpack the new federal policy and explain whether it will have an impact on rental demand (and prices) going forward.

Will the international student cap impact Canadian rents?

Macroeconomics for everybody! The (new) 10-Minute Take podcast from RBC Economics will explain (in simple terms) what the latest economic data means and why you should care.  It's everything you wanted to know but were too shy to ask -- in less than 10 minutes.