Monday, August 25, 2025

Latest

RBC Report Says Immigration Surge Is Disguising Recession

If it feels like a recession but the numbers say it’s not, it’s likely because the numbers are blown out of proportion by the recent surge in immigration, according to a recent analysis by the Royal Bank of Canada (TSE: RY). Despite avoiding a technical recession, the country is experiencing a decline in per capita output and rising unemployment rates.

According to the report, Canada’s economy has continued to expand, largely due to an unprecedented surge in population. Since mid-2022, the country has welcomed 2.1 million new consumers, representing a 6% population increase. This influx has bolstered overall economic figures, preventing consecutive GDP declines that typically define a recession.

The report highlights some concerning trends beneath the surface. Real per capita GDP has fallen in six of the past seven quarters, now sitting 3.1% below 2019 levels. Household spending per person, adjusted for inflation, is down 2.6% from its post-pandemic peak and 2% lower than pre-pandemic figures.

The unemployment rate has also seen a notable uptick, rising by 1.6 percentage points. While this increase is smaller than those observed in major recessions, it is historically significant. RBC notes that Canada has not experienced such a rise in unemployment without an accompanying recession since the 1970s.

The report attributes these challenges to the lingering effects of high inflation and aggressive interest rate hikes implemented by the Bank of Canada in 2022-2023. These factors have eroded household purchasing power and dampened consumer demand.

RBC anticipates some relief as the Bank of Canada begins to ease monetary policy. The bank has already cut interest rates by 25 basis points in June, with RBC forecasting three additional cuts by year-end. This easing cycle is expected to alleviate pressure on households, particularly those with variable-rate mortgages and credit market debt.

While the economic outlook remains challenging in the short term, RBC projects a return to positive per capita growth in the latter half of 2025. This recovery hinges on the gradual fading of interest rate headwinds and the assumption that labor market conditions do not significantly deteriorate.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

First Majestic Q2 Earnings: Another Record Quarter

Sandstorm Gold Fades Into Royal Gold Merger

Equinox Gold Q2 Earnings: Back On Track

Recommended

Emerita Resources Expands El Cura Drill Program By 10,000 Metres As Deposit Remains Open For Expansion

ESGold Signs MOU For Tailings Project In Colombia With Grades Up To 42 g/t Gold, 280 g/t Silver

Related News

Americans’ Credit Card Spending Slumped 1.2% in April

US consumer demand is showing signs of weakening, as households curtail their credit card spending...

Wednesday, May 17, 2023, 03:47:00 PM

Government Fast-Tracked Temporary Foreign Worker Applications By Skipping Fraud Checks, Report Reveals

An investigation by the Toronto Star has revealed that the Canadian government is expediting applications...

Wednesday, August 28, 2024, 10:56:00 AM

Two Provinces Offer to Share Asylum Seeker Burden as Quebec Pushes for Relief

Canada’s provincial leaders are grappling with the challenge of distributing asylum seekers more evenly across...

Thursday, July 18, 2024, 12:01:00 PM

Marc Miller Announces Plan to Reduce Temporary Residents… By Making Them Permanent

Immigration Minister Marc Miller on Friday discussed a plan to limit the number of new...

Monday, May 13, 2024, 02:14:00 PM

Canada Increases Cash Requirements for International Students

Canada is making significant changes to the financial requirements for international students starting January 1,...

Monday, December 11, 2023, 10:07:00 AM