Last week’s job numbers showing Canada actually added to payrolls in December could be bad news for borrowers.
The monthly employment figures brought some head scratching for those who follow this stuff closely. Canada was up but provinces with strong economies like Saskatchewan and Alberta were down.
One bank says Canada has one of the most resilient job markets in the world. Another says the participation rate is falling because boomers are retiring and, whether policy makers like it or not, we’ll have to open the immigration gates again.
But one line that is increasingly getting attention is the Bank of Canada’s plan for interest rates. It is hard, if not impossible, to find an economist who thinks rates will fall any further this year. They say the economy is holding up with no need for further stimulation and point to the latest job numbers as evidence.
In fact, it is far easier to find an economist who thinks the central bank will actually have to raise rates this year because of this underlying strength threatening to push inflation higher.
