Economics

RBC cardholder spending in Canada remained resilient in July with core retail sales up 1.1%, reversing June’s contraction.

Themes in July were core services surprised to the upside, stagflation lite is taking hold and tariff pressures still need to show up in some sectors.

We expect this gradual recovery to continue in the second half of 2025, setting the stage for stronger demand in 2026.

Rents are now declining in more than half of Canada’s 40 Census Metropolitan Areas from a year ago.

Our forecast calls for a 0.2% monthly rise in U.S. core inflation in July, pushing the annual pace to 3%.

Surprisingly, trade exposed sectors did not account for the employment loss in July.

Home sales momentum is rebuilding in several markets as earlier fears of economic doom fade.

On net, the revised data fits into our base case as we continue to expect job losses in trade-reliant sectors.

About 92% of Canadian exports to the U.S. crossed the border duty free in June — up slightly from 91% in May and 89% in April.

June’s trade balance is expected to narrow (slightly) to a deficit of $60.7 billion from $71.5 billion in May.

We continue to see a U.S. labour market that will soften under the weight of tariffs with the unemployment rate climbing into year-end.

We got significant color on Chair Jerome Powell’s perspectives on inflation coupled with a growing divide among FOMC members.