CANADA: Macklem - A Big Change In Layoffs Would Be A Concern

[Paraphrasing select excerpts from Governor Macklem's media Q&A in London]

• Q: Are you expecting layoffs to ramp up in the coming months?
• Macklem: Friday’s numbers continued what we’ve seen for a number of months (per audience Q&A earlier). Businesses are hiring but much more slowly than people entering the labour force, particularly impacting new entrants. To this point we haven’t seen a big change in layoffs, if you were to see that it would be a concern. [...] One of the reasons why we've been lowering interest rates is that we want to see household spending increase, business investment increase and job growth pick up. There will probably be some lag, with some further adjustment in the labour market, but we do want to see job growth pick up going forward. 

• Q: The BoC was to the fore in the tightening cycle and has been one of the leaders in the easing cycle. What’s given the BoC an insight to be a leader in the inflation look and what is your biggest fear to through you off the easing cycle?
  Macklem: I can’t comment on the fact that we’ve been out in front. [Asked generally but focuses entirely on US mon pol differences in the answer...] We obviously look very closely to the US economy. We both raised rates very forcefully and in Canada wasn’t quite as high as in the US at the peak so we didn’t raise rates quite as high. It makes sense for us to move relative to the Fed is greater mon pol traction, with different mortgage market. In Canada, a little more than half of a mortgages have reset at higher rates. Consumption has weakened more in Canada than in the US.
• On risks, he notes the Bank has been clear here and he repeats prior guidance including the Bank not being on on a predetermined path).