Size of the next rate cut depends on Tuesday's inflation figures “Although I thought a direct link was unlikely at the time, the Canadian labour market delivered a positive surprise on Friday: job growth was higher than expected and the unemployment rate unexpectedly fell. At the same time, wage growth fell more than expected - another sign that inflationary pressures are likely to ease.
First of all, this was just one labour market report and we will have to see in the coming months whether the Canadian labour market is recovering in a sustainable way. Moreover, the participation rate fell in September, which may have partially distorted the decline in the unemployment rate.” “More likely, the size of the next rate cut will depend more on tomorrow's inflation figures.