Macklem sees higher Canada jobless rate as labour market balances
BNN Bloomberg
Bank of Canada Governor Tiff Macklem said the country’s economy is headed for a soft landing, suggesting the central bank expects the unemployment rate to rise but that a large increase isn’t needed to achieve the inflation target.
On Monday, Macklem said Canada’s unemployment rate — which hit 6.2 per cent in May — was “just above” pre-pandemic levels, when the labor market was close to “maximum sustainable employment” — the highest level of jobs an economy can have without stoking inflation.
“We continue to think that we don’t need a large rise in the unemployment rate to get inflation back to the 2 per cent target,” Macklem said in prepared text of a speech he’s delivering in Winnipeg.
Canada’s labor market has loosened and is “closer to being in balance,” he said. It’s harder to find a new job, which is particularly affecting young workers and newcomers who are facing unemployment rates that are rising faster than those of other Canadians, he added.
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