The Globe and Mail reports in its Saturday, July 12, edition that the latest dismal employment numbers offer the Bank of Canada another reason to keep interest rates at historically low levels. The Globe's Brian Milner, Richard Blackwell and Greg Keenan write that the Canadian economy shed 9,400 jobs in June, pushing the unemployment rate up slightly to 7.1 per cent from 7 per cent in May and underscoring a deep divide in the national labour market. Alberta added 9,400 jobs, while Ontario suffered a steep loss of 34,000.
The lacklustre numbers helped drive down the value of the dollar and bolstered the case for the BOC to turn even more dovish on monetary policy at next week's policy-setting meeting. The BOC "wants to see the dollar going down" to fuel an export-led recovery, says CIBC World Markets analyst Benjamin Tal. He says: "It will basically use any excuse to continue the message that the economy is not as strong as perceived by many, [and] the [higher] inflation numbers are temporary. Anything that helps the dollar [weaken] is welcome as far as the Bank of Canada is concerned."
The Globe notes that Ontario's hard-hit manufacturing sector continues to bear the brunt of the disappearing jobs.
© 2024 Canjex Publishing Ltd. All rights reserved.