Recent changes in consumer prices, output, employment & household finances have been a key focus in the world of trade, with movements in economic data up until the summer. The economic impact of the changes in economic conditions, particularly the trade tensions between the USA and Canada, has been a significant focus.
Despite escalating trade tensions, the 1st quarter reflected economic growth. However, the 2nd quarter reflected an exports scale-back with gross domestic product falling by 0.4%, claimed as the largest quarterly contraction during the last 9 years, outside the pandemic timescale. Business outlays & imports on machinery & equipment witnessed a setback in the 2nd quarter, with US tariffs bearing a level of uncertainty on economic activity. Business inventory increases & household spending reflected partial mitigation in trade & investment. Most of the decreases in economy-wide output during the 2nd quarter seemed to reflect lower activity amongst manufacturers & wholesalers, with US tariffs being placed on Canadian steel, aluminium & autos. Employment growth reflected a stall during the 1st half of 2025, with uncertainty prevailing on hiring intentions, with layoff levels reflecting similar figures to 2024. Net employment growth stood still nationally up to August 2025. So was the net increase in payroll employment up to June 2025. The unemployment rate reflected a 0.5% increase to reflect 7.1% up to August 2025.
Headline Consumer inflation declined below 2% during April–August 2025 due largely to the removal of the consumer carbon levy. Annual consumer price growth averaged 2.7% during the 5-month period of April–August that excluded energy prices. The overall impact of tariffs on consumer prices sustains a difficulty in gauging the prices of certain consumer goods, reflecting either direct or indirect effects of tariffs.
The equity markets reflected a surge as household wealth rose during the first half of 2025. Mortgage borrowing reflected easing during the first half, displaying growth over levels in 2023 and early 2024. The ratio of household credit market debt to disposable income showed higher figures, while wage growth declined.
