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MNI INTERVIEW: Canada Faces Recession, Not Wage Spiral-Adviser

(MNI) Ottawa
OTTAWA (MNI)

Labour institute leader says strong job market means a recession would be milder than past downturns.

Canada is much more likely to face a recession in the near term than a wage-price spiral as the central bank takes needed action to pull demand back in line with supply, a labour market adviser to federal and provincial governments told MNI.

“The probability that we’ll enter or are in a recession right now is pretty high given what central banks here in Canada and around the world are doing,” Tony Bonen, executive director of the Labour Market Information Council, whose board is comprised of officials from every province, Statistics Canada and the federal labour department. Central bankers in Canada “are taking that action to constrain growth, precisely because markets are overheated. The labor market response to that will show up in the data with a bit of a delay.”

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Canada is much more likely to face a recession in the near term than a wage-price spiral as the central bank takes needed action to pull demand back in line with supply, a labour market adviser to federal and provincial governments told MNI.

“The probability that we’ll enter or are in a recession right now is pretty high given what central banks here in Canada and around the world are doing,” Tony Bonen, executive director of the Labour Market Information Council, whose board is comprised of officials from every province, Statistics Canada and the federal labour department. Central bankers in Canada “are taking that action to constrain growth, precisely because markets are overheated. The labor market response to that will show up in the data with a bit of a delay.”

Keep reading...Show less