on Friday that there was a large jump in the Canadian unemployment rate in January, rising to 6.5 per cent from six per cent, as the economy was hit hard by Omicron closures, which resulted in 200,000 lost jobs. And average hourly wages grew 2.4 per cent from January 2021, compared with year-over-year gains of 2.7 per cent in the previous two months, according to Statistics Canada.Article content
The last time the U.S. unemployment rate dropped to four per cent, the U.S. Federal Reserve was already raising rates and the effective Fed funds rate was at 1.41 per cent versus 0.25 per cent today, according to Sven Henrich, a market strategist at NorthmanTrader. Compare this to the latest Bank of Canada meeting where the central bank stood pat on rate hikes and, in my opinion, came out with a weak argument to backstop that decision. That said, it may soon not have a choice but to raise rates as it loses control over a falling currency that already appears to be delinking from the price of oil.