BoC: LOW UNEMPLOYMENT UNSUSTAINABLE, CONTRIBUTING TO INFLATION

Nov 10, 2022

By Bob Komsic

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While last June’s record low Canadian unemployment rate of 4.9% seems like a good thing, central bank governor Tiff Macklem says it needs to go up for inflation to slow down.
”We need to rebalance the labour market,” in the view of the head of the Bank of Canada.
”This will be a difficult adjustment.  We want to do this in the best way possible for Canadian workers and businesses.”
Macklem says businesses struggling to find workers cannot keep up with demands for goods and services which is fueling higher prices.
The bank governor says an increase in immigration levels will help businesses grow and will ease inflation.
Macklem adds the expansion of universal childcare will eventually see more women join the workforce, but that both of those are not substitutes for using interest rates to bring down inflation.
Inflation fell to 6.9% in September from a four-decade high of 8.1% in June.
October’s consumer price index numbers will be released next Wednesday.
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