Wednesday, June 7, 2023
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Canada's economy has room to slow due to job vacancies, Bank of Canada governor says

TORONTO (Reuters) – Bank of Canada Governor Tiff Macklem said the economy has room to slow based on an “unusually high” number of job openings in the labor market.

In an interview that aired on CBC Radio Sunday, Macklem said the current fight against inflation is the largest since the central bank began targeting it years ago The biggest test facing.

But he assured Canadians that monetary policy is working and he expects inflation to return to the central bank’s 2% target by 2024. Canada’s headline inflation fell to 7.0% in August, with core inflation around 5%.

“We need to cool the economy, (but) we don’t want to overcool the economy,” Macklem said.

“When we look at the economy right now, there are an unusually high number of vacant jobs…it’s a clear signal that the economy has room to slow down and not many people are out of work,” he added. Say.

Canadian employers are aggressively seeking to fill nearly 1 million jobs as of July, while the job vacancy rate fell from a peak of 6.0 per cent in April to 7.0 per cent in July, data released Friday showed. 5.4% 2022.

The Bank of Canada has raised its benchmark interest rate by

basis points since March in one of the steepest and fastest tightening cycles on record. Economists and currency markets are leaning towards upward 26 basis points in October 26.

Macklem said parts of the economy that are sensitive to rate hikes are starting to slow.

“Let me be clear, what we don’t want is that…inflation and wages are not in line with our 2% target, because if that happens, then we actually need to slow the economy even further speed, bringing inflation back to 2 percent. That’s what we call an early rate hike,” Macklem added.



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