The Bank of Canada may shift its focus from the output gap to labor market indicators, such as unemployment and wages, in order to make inflation forecasts and guide its interest rate decisions, according to a report by CIBC economists. The report suggests that the labor market has become a more reliable indicator of excess demand or supply, and forecasts that if the job market outlook suggests it's not necessary, there may be no more rate hikes this year and rate cuts in early 2024.
Employment growth in the US likely cooled and wage increases moderated in August, reducing the urgency for another interest-rate hike by the Federal Reserve and tempering inflation risks.
Job creation in the US slowed in August, indicating that the strong economy could be starting to weaken under pressure from higher interest rates. Private employers added 177,000 jobs, well below the previous month's total of 371,000. Pay growth also slowed, suggesting more sustainable growth as the effects of the pandemic recede. Investors and economists remain uncertain about the future of US inflation and whether the economy can continue to grow without a significant slowdown.
The US added more jobs than expected in August, but the unemployment rate increased, while average hourly earnings and nonfarm payrolls growth were slightly below forecasts.
The US added 187,000 jobs in August, but the unemployment rate rose to 3.8 percent, indicating a plateau in the labor market as the Federal Reserve considers another interest rate hike.
Canada's economy unexpectedly contracted in the second quarter, raising concerns of a possible recession, as declines in housing investment and slower exports and household spending impacted growth. This is likely to lead the central bank to hold interest rates steady.
The August jobs report showed solid hiring, with employers adding 187,000 payroll positions, but the unemployment rate unexpectedly jumped and wage growth eased, leading to speculation that the Federal Reserve may have hiked interest rates for the last time.
The Canadian dollar strengthened against the US dollar as stronger-than-expected jobs data raised the possibility of another interest rate hike by the Bank of Canada.
The unemployment rate in Canada remained steady at 5.5% in August, while employment saw a net increase of 39,900 and average hourly wages rose by 4.9%. The Canadian dollar experienced a bearish reaction to the jobs report, with the USD/CAD pair losing 0.5% on the day.
Economists predict that Canada's inflation rate is likely to increase to around four percent in August, mainly due to higher gasoline prices, reversing the previous progress made.
The Canadian economy has entered a long-delayed recession due to highly indebted households, overvalued home prices, and a slowdown in consumer spending, with the recession expected to last until the first quarter of 2024 and result in a 1.5% decline in GDP and an increase in the unemployment rate to 7.2%.
High inflation is leading to increased labor action in Canada as workers demand higher wages to combat the eroded purchasing power caused by rising costs of living, according to a report by RBC Economics. The report suggests that taming inflation is crucial to restoring peace in labor relations in the country.
U.S. job openings unexpectedly increased in August, driven by demand for workers in the professional and business services sector, pointing to a tight labor market that could push the Federal Reserve to raise interest rates next month.
Summary: Bank of Canada deputy governor Nicolas Vincent states that businesses in Canada are increasing their prices more often and by larger amounts, contributing to higher-than-expected inflation.
The US economy added 336,000 jobs in September, surpassing economist predictions and causing a slight dip in the price of bitcoin, while stock and bond prices continue to decline.
US job growth exceeds expectations, with 336,000 jobs added in September, increasing the likelihood of further rate hikes by the Federal Reserve, while in Canada, job gains of 63,800 in September and soaring wages also raise the chances of another rate hike.
Employers added 336,000 jobs in September, exceeding economists' predictions, signaling a stronger labor market and raising concerns that the Federal Reserve may need to raise interest rates further to control inflation.
The US economy added 336,000 jobs in September, exceeding expectations, but investors are concerned about the prospect of higher interest rates, causing stocks to slump and bond yields to surge.
The US economy added 336,000 jobs in September, surpassing economists' expectations, raising concerns that the labor market may not cool as fast as the Federal Reserve desires in their battle against inflation.
The U.S. economy added 336,000 jobs in September, surpassing expectations, prompting concerns about the need for further measures to slow down the economy and control inflation.
The US economy added 336,000 jobs in September, surpassing expectations and leading to concerns about higher interest rates and inflation, causing the dollar to rise and stocks to fall.
U.S. employers added 336,000 jobs in September, potentially strengthening the case for another interest rate increase by the Federal Reserve, despite wage growth remaining muted and upcoming inflation data expected to show continued slowing.
The September jobs report showed the addition of 336,000 jobs and no change in the unemployment rate at 3.8%, exceeding expectations and indicating a strong job market amidst economic headwinds.
U.S. employers added 336,000 jobs in September, surpassing expectations, but the strong job growth could complicate the Federal Reserve's efforts to control inflation.
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