Bank of Canada Governor Tiff Macklem: There’s Still Room for Growth in the Canadian Job Market Despite Declining Inflation Rates

Bank of Canada Governor Tiff Macklem has emphasized that there is still room for growth and job creation in the Canadian labor market, despite inflation rates declining. He acknowledged that some groups, such as young workers and newcomers, are facing challenges in finding employment.

During a speech to the Winnipeg Chamber of Commerce, Macklem highlighted that the bank believes there is slack in the economy, allowing for more job opportunities despite inflation moving closer to the 2% target. He mentioned that the bank does not anticipate a significant rise in the jobless rate to achieve the inflation target but aims for a soft-landing scenario.

Macklem also pointed out that slowing down non-permanent resident growth could be beneficial for controlling accommodation costs and population growth. However, he has also expressed concern about wage growth and did not provide a timeline for further easing measures before his speech. Before his speech, markets were anticipating another rate cut in July. The annual inflation rate recently reached a three-year low of 2.7%, and Statistics Canada is set to release May inflation data soon.

The Bank of Canada’s next monetary policy decision is scheduled for July 24, where updated economic forecasts will be provided. Macklem’s remarks suggest a cautious approach to balancing economic growth with inflation targets.

In summary, while some groups are facing challenges in finding employment, there is still room for growth and job creation in the Canadian labor market. The Bank of Canada Governor Tiff Macklem emphasized this point during his speech to the Winnipeg Chamber of Commerce while acknowledging concerns about wage growth and accommodating population growth through controlling accommodation costs.