The Globe and Mail reports in its Monday, Nov. 27, edition that the Bank of Canada is counting on a slowing labour market to help ease wage growth and take the wind out of inflation. The Globe's David Parkinson writes that recent unionized agreements, however, suggest that wages could linger in the inflation equation long after other pressures have dissipated.
Statistics Canada will release on Friday new monthly employment figures that will very likely show a further softening of the job market. Economists estimate that employment inched up by maybe 10,000 to 15,000 jobs in November, nowhere near enough to keep pace with growth in the labour market, which has averaged more than 50,000 a month over the past six months. With jobs not keeping up with the number of workers to fill them, the unemployment rate will edge up again, after hitting a 20-month high of 5.7 per cent in October.
Those numbers indicate that the high labour demand and severe worker shortages that have dogged the employment market -- putting upward pressure on wages while adding problematic fuel to the inflation fire -- have gone into reverse. The Globe expects inflation pressures from labour costs to soon follow, as the job market rapidly loosens.
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