December 9, 2023

Canada: Employment data increases pressure on BoC

Canada: Employment data increases pressure on BoC

According to economic data released on Friday, Canadian jobs rose by 39,800 in May, beating expectations. CIBC analysts believe that the Bank of Canada may raise interest rates slightly, according to the latest economic data.

Important Quotes:

“Another steady rise in employment, a drop in the unemployment rate and a sharp acceleration in wage growth are putting pressure on the Bank of Canada to continue to raise interest rates aggressively. The number of employees has risen to 40,000, which is just over 27.5k. Was, now that wage growth is also rising rapidly, the Bank of Canada will feel high pressure to push interest rates to the middle of its neutral range (2-3%).) And may be even higher.

“Continuing solid economic momentum, coupled with signs that inflationary pressures are rising rather than decreasing, the Bank of Canada is able to raise interest rates slightly higher than we previously expected. We now see a 2.75% (previously 2.5%) peak. We expect it to fall enough, however, to prevent the Bank from raising rates above the 3% limit on the neutral ratio limit. “

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