Central banks likely 'perspiring' after strong jobs gains: expert

The Canadian economy blew past economists’ expectations with a strong monthly jobs gain that could put pressure on the Bank of Canada as it considers its next interest rate move, market watchers said on Friday.

Higher wages is a continued area of concern for central bankers who are trying to bring inflation expectations under control, according to Tiffany Wilding, managing director and North American economist at PIMCO.   “Wages are looking incredibly sticky,” she told BNN Bloomberg in a television interview.    Wage growth in Canada along with the unexpected job gains will complicate matters for the Bank of Canada, Wilding said, even with signs that the economy is slowing.   “Although the Bank of Canada is close to being done, it’s certainly possible for them to get in one more rate hike in October,” she said.   MIXED SIGNALS   While the surprisingly hot jobs figures point to strength on the surface, Nathan Janzen, assistant chief economist at RBC, said the full picture is more mixed than headlines suggest.    “There are still signs that hiring demand continues to soften under the surface relative to surging labour supply, with broader unemployment measures pointing to more softening than the official unemployment rate itself implies,” Janzen wrote in a Friday note.    Still, he said it will be difficult for the Bank of Canada to ignore the data indicating growth in employment and wages.     RBC is not assuming further interest rate hikes from the Bank of Canada this year, and its economists pointed to another monthly inflation report and the central bank’s Business Outlook Survey that are still due to be released before next rate decision.