Weakening job market was on BoC's mind as it cut interest rates, summary suggests

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OTTAWA — The Bank of Canada wants the economy to pick up speed again and some members of its governing council are concerned that weak job market conditions could hinder that process.

That's according to the central bank's newly released summary of deliberations detailing discussions ahead of the July 24 rate decision.

The summary reiterates that the bank's decision to lower its policy rate last month was partly driven by the desire to boost economic growth. As consumer price growth continues to ease, the central bank is placing more emphasis on the risks associated with undershooting its two per cent inflation target.

The governing council discussed the various indicators that suggest there is slack in the labour market and some members noted that further weakening could delay a rebound in consumption spending, which would in turn weigh on economic growth and inflation. As high interest rates chill the economy, Canada's unemployment rate has steadily risen over the last year, reaching 6.4 per cent in June.

 

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