It's now seeing a 'moderate' contraction in the first and second quarters of 2023, a quarter sooner than its earlier forecast From m_zadikian
A recession could hit the Canadian economy as early as the first quarter of 2023, a new report from RBC Economists says. REUTERS/Alex FilipeIt's now seeing a "moderate" contraction in the first and second quarters of 2023, a quarter sooner than its earlier forecast, as higher borrowing rates take their toll on the economy.
The aggressive interest rate hike campaigns in Canada and the U.S. will quicken the arrival of a domestic recession but what happens with rates after that will be the biggest factor in how quick the economy recovers, the report says. He didn't rule out even more rate hikes outside of what's already widely anticipated by Bay Street if inflation proves persistent.The sky-high cost of living and higher interest rates are poised to shave almost $3,000 off purchasing power for the average household in 2023, the report says, offsetting recent gains in wages.
"An excess of job openings and a scarcity of workers will protect against a major spike in unemployment in the very near term. The jobless rate will still rise, but we expect longer job search times for the unemployed, and hours cut for the employed at first," Janzen said.
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