Forward Guidance: Our Weekly Preview

For the week of June 23^rd, 2025

We expect next Friday’s Canadian growth domestic product data will show slowing growth following a jump in the first quarter that was largely driven by front-running tariffs.

GDP is expected to have eked out a 0.1% increase in April, matching Statistics Canada’s preliminary estimate from a month ago. The trade-exposed manufacturing sector softened with sales falling sharply in subsectors targeted directly by U.S. tariffs including transportation equipment, and metal products. However, retail sales volumes edged up in April, and early data indicates a jump in oil production in Alberta.

The advance estimate for May output will be closely watched as early indicators are mixed. Trade-reliant sectors like manufacturing continued to weaken with contracting hours worked and employment declining. But, other parts of the economy provided offset and overall employment still edged higher in May. Data from Indeed.com showed hiring demand stabilizing into June.

Tariffs have impacted production and employment in certain sectors, but it’s likely too soon to see substantial effects in consumer prices. Some import-reliant categories like food and autos have experienced accelerating price growth, but recent upside surprises in consumer prices have predominantly come from domestically produced and consumed services.

For May, we expect Canadian consumer price index growth to edge up 1.8% year-over-year from April’s 1.7% with excluding food and energy price growth holding steady at 2.6%. The removal of the consumer carbon tax in April in most provinces will continue to keep energy prices well below levels from a year ago. The Bank of Canada’s preferred core measures (which exclude indirect taxes like the carbon tax) likely eased slightly after exceeding 3% in April.

This report was authored by Assistant Chief Economist Nathan Janzen and Senior Economist Claire Fan.

Explore the latest from RBC Economics:

Subscribe Here

Disclaimer

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. The reader is solely liable for any use of the information contained in this document and Royal Bank of Canada (“RBC”) nor any of its affiliates nor any of their respective directors, officers, employees or agents shall be held responsible for any direct or indirect damages arising from the use of this document by the reader. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

This document may contain forward-looking statements within the meaning of certain securities laws, which are subject to RBC’s caution regarding forward-looking statements. ESG (including climate) metrics, data and other information contained on this website are or may be based on assumptions, estimates and judgements. For cautionary statements relating to the information on this website, refer to the “Caution regarding forward-looking statements” and the “Important notice regarding this document” sections in our latest climate report or sustainability report, available at: https://www.rbc.com/community-social-impact/reporting-performance/index.html. Except as required by law, none of RBC nor any of its affiliates undertake to update any information in this document.

Economics