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Canada's unemployment rate could climb about 1.5 percentage points as record job vacancies return to normal according to a paper by a central bank economist, a more specific estimate than given earlier by Governor Tiff Macklem.
That result is from a paper analyzing the Beveridge curve relationship between vacancies and the jobless rate by Bank of Canada staff economist Alexander Lam published Thursday. While the curve shifted out during the Covid pandemic to suggest generally higher jobless rates, that trend has recently reversed so "demand could cool while causing a rise, but not a surge, in unemployment," Lam found.
Macklem referenced the paper in a Nov. 10 speech where he said unemployment could rise "somewhat" but not be high by historical standards. Labor groups and lawmakers say the Bank should back off rate hikes that would drive up unemployment. (See: BOC Should Ease Up On Rate Hikes- Senator)
Source: Bank of Canada
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.