Last week’s employment report is another finger on the scale leaning towards another interest rate cut.
The Bank of Canada’s next rate setting is next week and economists are increasingly looking for a further reduction in the central bank’s benchmark rate. This on the heels of economic data showing the Canadian economy is slowing and needs a bit of a boost.
The latest data point is last Friday’s employment numbers showing the country dropped 66,000 jobs in August after losing 41,000 in July. That’s more than 100,000 positions in just two months and it was the summer months when a lot of seasonal activity takes place.
Central Canada was hit hardest by the declines, largely in the tariff sensitive manufacturing sector. Saskatchewan, on the other hand, showed a fairly steady pace over July and August.
The last item the central bank has to weigh is inflation. The next report is also next week, just before the interest rate announcement. Any further softening of inflationary pressures will probably be enough to trigger another cut in the benchmark rate.
