Nathan Janzen, assistant chief economist at Royal Bank of Canada
“Wage growth has accelerated substantially but is still running behind inflation. And the impact of Bank of Canada interest rate hikes has yet to fully be felt in the economy. Some early signs that broader inflation pressures have started to ease, and indications that domestic demand is softening, mean the BoC could be close to the end of the current interest rate hiking cycle.
“Today’s report reinforced expectations that the Bank of Canada will continue hiking its policy rate at its meeting next week. With the rate likely to get to 4.25 per cent, the BoC will have undoubtedly reached restrictive territory. Though we haven’t seen it in the labour market data as of yet, the impact of the BoC’s aggressive moves will eventually cool the labour market. With the recent momentum, this is expected to take pace in mid to late 2023.
“Overall, I’d say this is almost a no-news-is-good-news report, at least from the headline numbers. We’re at a point in the economic cycle where the unemployment rate is already quite low and we’ve got uncertainty across the global economy, where things are just remaining resilient. At least for the time being, this is probably the best we can hope for, for now.”Article content
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