The Globe and Mail reports in its Monday, Nov. 21, edition that central-bank economists are betting that unemployment will not spike as much as in previous downturns because of the elevated level of job vacancies across the country. The Globe's Mark Rendell writes that there were nearly a million unfilled positions in August, according to Statistics Canada.
With the economy expected to stall in the coming quarters, central bankers anticipate that companies will remove job postings without also laying off a large number of workers.
This is key to the Bank of Canada's "soft-landing" narrative: the notion that inflation can be brought under control without causing a major recession.
Critics, however, argue that the BOC is being too optimistic about job vacancies acting as a cushion for falling labour demand. A BOC research paper, published last week, estimates that the unemployment rate would "most likely" rise to about 6.7 per cent if demand for workers drops back to prepandemic levels. That is up from a near-record low unemployment rate of 5.2 per cent last month. BOC economist Alexander Lam wrote in the paper that this would amount to a "material" increase in joblessness.
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