Analysis of Canadian Economic Outlook and U.S. Labor Market Trends

This document is a monthly economic forecast update from RBC Economics, dated November 13, 2025. It outlines the anticipated impact of the Canadian government's fall budget on deficit to GDP figures and discusses the economic outlook for both Canada and the U.S. The report notes that Canadian household spending has remained strong despite trade uncertainties and a softening labor market. It highlights early signs of stabilization in Canadian labor markets and suggests that the worst economic disruptions from tariffs may be behind. The document also addresses the effects of the U.S. government shutdown on GDP growth, projecting a temporary decline in Q4 before a rebound in Q1 2026. The report anticipates gradual reductions in the U.S. Fed's interest rates and maintains a cautious outlook for the Canadian economy, emphasizing the resilience of consumer spending and inflation pressures. Overall, the update provides a comprehensive analysis of current economic conditions and forecasts for the near future.