MNI BRIEF:BOC Paper- Joblessness To Rise 1.5% As Vacancies Dip
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