As the BoC takes a pause from hiking rates, all eyes are on the labour market

OTTAWA –

As the Bank of Canada takes a pause from elevating rates of interest to evaluate the results of upper borrowing prices on the economic system, economists shall be paying shut consideration to how the labour market is affected.

On Wednesday, the central financial institution raised its key rate of interest for the eighth consecutive time and stated it was taking a conditional pause, retaining the door open to additional fee hikes if inflation is not tamed.

In its newest financial coverage report, the Bank of Canada stated it expects the total results of fee hikes on the labour market to play out over an extended interval.

As companies and shoppers pull again on spending, economists anticipate unemployment to rise, although by how a lot is up for debate because the labour market has remained robust regardless of the central financial institution’s tightening cycle.

Labour teams have voiced considerations concerning the Bank of Canada’s fee hikes in latest months, with Unifor president Lana Payne beforehand accusing the central financial institution of waging struggle on the working class.

However, some economists are cautiously optimistic that employment might show to be considerably resilient to the slowdown, provided that unemployment is at present close to historic lows.

This report by The Canadian Press was first revealed Jan. 26, 2023