Connecting the Dots
In December, Canada’s economy only added 100 jobs. Because of this, experts say it’s more likely that the Bank of Canada will lower interest rates in the second quarter of this year.
“The falling job market and rising unemployment over the last six to twelve months are moving things in the direction of a cut,” Indeed senior economist Brendon Bernard said in an interview on Friday.
He said that after Statistics Canada posted what he called “weak” employment numbers for the month before.
According to the median estimate of economists surveyed by Bloomberg, the unemployment rate in Canada stayed the same at 5.8% in the Labour Force Survey. This was a little lower than the 5.9% rate that was predicted.
Also, the 100 new jobs were a lot less than the 15,000 jobs that were supposed to be added. This comes after 25,000 new jobs were added in November.
Bernard said that the numbers make it more likely that the Bank of Canada will lower interest rates when they meet on April 10.
One type of economic data that the central bank is looking at is employment numbers to see if its rate-tightening cycle, which is meant to bring down inflation, is hurting the economy.
Bernard said that Canada would need tens of thousands of new jobs every month to keep up with population growth.
“It’s not a good sign to come in pretty flat,” Bernard said. “The share of the population with a job went down, even though the unemployment rate stayed the same. This is because fewer people were working.”
Temperature Rising: Wage Growth Shows No Signs of Cooling Down
An economist at RSM Canada, Tu Nguyen, said that the job numbers from last month make a rate cut “imminent to avoid a downturn.”
Strong wage growth of 5.4%, according to Nguyen and Bernard, may make it harder for the Bank of Canada to make a decision. This is because the central bank might see that number as a sign of persistent inflation.
Bernard said, “That wage growth might be the ace in the hole there.”
“But I think we have a sense that these measures of wage growth are really behind what’s happening in other parts of the economy, which are more likely to follow the inflation numbers than to lead them.”
Temperature Rising: Wage Growth Shows No Signs of Cooling Down
An economist at RSM Canada, Tu Nguyen, said that the job numbers from last month make a rate cut “imminent to avoid a downturn.”
Strong wage growth of 5.4%, according to Nguyen and Bernard, may make it harder for the Bank of Canada to make a decision. This is because the central bank might see that number as a sign of persistent inflation.
Bernard said, “That wage growth might be the ace in the hole there.”
“But I think we have a sense that these measures of wage growth are really behind what’s happening in other parts of the economy, which are more likely to follow the inflation numbers than to lead them.”
Temperature Rising: Wage Growth Shows No Signs of Cooling Down
An economist at RSM Canada, Tu Nguyen, said that the job numbers from last month make a rate cut “imminent to avoid a downturn.”
Strong wage growth of 5.4%, according to Nguyen and Bernard, may make it harder for the Bank of Canada to make a decision. This is because the central bank might see that number as a sign of persistent inflation.
Bernard said, “That wage growth might be the ace in the hole there.”
“But I think we have a sense that these measures of wage growth are really behind what’s happening in other parts of the economy, which are more likely to follow the inflation numbers than to lead them.”
Bank of Canada
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