Canada economy: Latest News

unemployment rate rose to 5.2 per cent in May, Statistics Canada said Friday, a sign of weakening in the country’s tight labour market that will help inform the Bank of Canada’s future interest rate decisions.Employment overall was little changed in the month, the agency said, with a modest 17,000 jobs lost. Employment fell among youth aged 15-24 and rose among those aged 25-54.While part-time employment rose to the tune of 15,500 jobs in May, Canadian employers collectively cut 32,700 full-time positions, according to the report.The unemployment rate rose for the first time since August 2022, StatCan said, up from 5.0 per cent in April.The job report this morning comes after the Bank of Canada’s decision this week to raise its key interest rate target by a quarter of a percentage point to 4.75 per cent.In raising its key rate, the central bank said the labour market remains tight, reflecting continued strong demand for workers.“Some cracks appeared within the Canadian labour market in May, but these may not yet be wide enough to convince the Bank of Canada that inflation is about to meaningfully cool off,” said CIBC senior economist Andrew Grantham in a note to clients Friday morning.He suggested the weaker jobs figures might see markets scale back expectations of additional rate hikes to come, but the Bank of Canada’s policymakers may need to see “further softening” to convince them they can leave rate unchanged.Average hourly wages were up 5.1 per cent in May, continuing to outpace inflation.

The Bank of Canada ended its interest rate pause on Wednesday as it looks to stamp out inflation and cool the country’s red-hot economy.

Bank of Canada’s interest rate pause is set for its toughest challenge yet on Wednesday as policymakers weigh whether another hike is needed to quell a resilient economy and push inflation down further.While money markets and some economists say that another hike is in the cards for this week’s interest rate decision, those who spoke to Global News argue the central bank is better off waiting to move off the sidelines and signalling a possible increase later this summer.The Bank of Canada’s rate hike campaign has been on a “conditional pause” since March, following eight consecutive increases that raised the central bank’s policy rate to 4.5 per cent, up from the lows of 0.25 per cent seen through much of the pandemic.The central bank said it could remain on pause as long as data continued to show the economy was cooling enough to bring inflation back down to its two per cent target, which has been forecast to reach in 2024.The rate increases to date have raised the cost of borrowing for Canadians and their banks in an effort to cool the economy and take some of the steam out of inflation, which reached 40-plus-year highs in 2022.Inflation has declined significantly, though Statistics Canada’s headline reading ticked back up slightly to 4.4 per cent in the latest consumer price index report for April from March’s 4.3 per cent.The economy, meanwhile, has proved hotter than the Bank of Canada’s estimates: gross domestic product (GDP) was higher than forecast in the first quarter of the year, and expectations of a pronounced slowdown haven’t yet materialized.Avery Shenfeld, chief economist at CIBC Capital Markets, tells Global News that the economy can only run unchecked for so long before a flurry of spending drives prices

The national economy continued to grow overall in the first quarter of 2023 as consumers spent more in the face of recession fears, according to Statistics Canada.

Bank of Canada wants to know what Canadians think about the possibility of a digital loonie.Consultations on what Canadians would like to have included in a digital currency are open online from May 8 until June 19, the Bank of Canada said Monday.The central bank notes, however, that the decision to launch a digital version of the Canadian dollar remains in the hands of Parliament and physical coins and banknotes aren’t going anywhere.Compared to private cryptocurrencies like Bitcoin, which can sometimes fluctuate in value like a stock, a digital currency backed by the central bank would not be subject to the same level of volatility — it would always retain the same value as a Canadian dollar.The central bank wants to know how Canadians would use a hypothetical digital currency, as well as any concerns they have about security and accessibility.While the Bank reassured Canadians in its announcement that physical banknotes will always be available to those who want them, it said in a release Monday there could be a future where cash transactions are not common in day-to-day banking, which could inadvertently exclude some from the financial system.There is currently no need for a digital currency in Canada, the central bank said in the release.But it added that if other central banks or private organizations eventually adopt their own digital currencies — China and India are two such countries that have already taken the step — falling behind could be a risk to Canada’s economy and the stability of the financial system.“As Canada’s central bank, we want to make sure everyone can always take part in our country’s economy,” Carolyn Rogers, senior deputy governor at the central bank, said in a statement.

interest rates are putting stress on Canadian real estate — but it’s not just homeowners feeling the pinch.Experts are warning that Canada’s commercial real estate sector could be a “canary in the coal mine” for a steeper downturn in the economy as an uncertain return to the workplace leaves many office landlords in a precarious position.Much of the fears for commercial real estate — a sector that includes office towers, retail spaces, warehouses and production plants — stem from the United States and recent instability in the banking industry.First Republic, a regional bank that catered to a wealthy clientele, was the latest casualty of the instability that has seen shockwaves spread beyond the U.S. to global banking institutions.It was Charlie Munger, vice-president of Berkshire Hathaway and right-hand man to investment magnate Warren Buffett, who rang alarm bells over the weekend about the state of U.S.

Bank of Canada left its benchmark interest rate unchanged on Wednesday, in keeping with expectations from economists.The decision to keep its key policy rate at 4.5 per cent in its second consecutive meeting comes after a year of rapid rate hikes aimed at taming inflation. Read more: U.S.

Ottawa’s 2023 budget — will Canada’s previously roaring economy coast into a so-called “soft landing” as it slows, or tumble sharply into a recession?Ongoing calls from a chorus of economists predicting a recession to hit Canada in 2023 have come up against surprisingly strong economic data in the early part of the year, making the tea leaves of an economic downturn especially hard to read.A recession is a widespread decline in economic activity over a certain period of time – usually defined as two straight quarters of negative growth.Ottawa’s 2023 budget bases its economic forecast on a consensus of private sector economists.That document, released March 28, showed that economists’ place the odds of a recession higher than when they were last polled for the 2022 fall economic update.But if the economy is supposed to be slowing down right now, someone might want to tell the economy.January’s gross domestic product (GDP) figures outpaced initial estimates from Statistics Canada with 0.6 per cent growth, rebounding from the flat reading in the final quarter of 2022.Canada’s labour market meanwhile held tight with a 5.0 per cent unemployment rate through the first quarter of 2023. The country’s employers have been in a hiring mood as of late, with net 383,000 positions added since last September.

federal budget won’t fuel inflation but may be missing the bigger economic picture as a recession looms and the country’s cost-of-living crisis continues to squeeze Canadians, experts say.The budget unveiled by Finance Minister Chrystia Freeland on Tuesday promises to cut more than $15 billion in spending from the government’s books, but also abandons plans from the fall economic statement that projected a map to balanced budget. The federal deficit is projected to decrease by up to $14 billion in the downside scenario by 2027-28 from $43 billion.“If you look at the size of the deficit that they are projecting going forward, they’re not really adding materially to inflation relative to the path that we were already on,” said Craig Alexander, the former chief economist of Deloitte, in an interview with Mercedes Stephenson that aired Sunday on The West Block.

As Canada’s loonie falters against the surging U.S. dollar, experts say the effect could worsen inflation on some goods imported from south of the border.

Call it a tale of two economies: the latest figures from Statistics Canada on Friday show economic growth in the country slowed but likely avoided a decline through the first half of the year, just as the United States reported its second consecutive quarter of contraction a day earlier.

Canada is leaning toward a new era of 1970s-style stagflation as the pace of economic growth slows yet inflation remains stubbornly high, economists say.

Ontario budget is doubling down on support for families – in one case, quite literally.The government of Premier Doug Ford is planning to spend a fresh $980 million to increase the amount parents can receive through the Ontario COVID-19 Child Benefit to $400 from $200 per child, while families with children with special needs stand to receive $500 from what will be the province’s third round of payments under the benefit. Ontario providing $580,000 to create 39 child-care spaces at Norwood high school Ontario is also proposing a temporary $75-million 20-per-cent boost to its Childcare Access and Relief from Expenses tax (CARE) tax credit for 2021.

pandemic struck last March, she and the hotel’s other employees, many of whom are women and immigrants, were laid off. With a lack of travel weighing down bookings, the hotel has refused to commit to bringing its workforce back, leaving workers like Cardona to fend for themselves with no end in sight.“I’m on the verge of going homeless if things continue this way,” Cardona said.

Bank of Canada will provide a window into its thinking on the economy as it makes an announcement about its trendsetting rate.The key policy rate has been at 0.25 per cent almost exactly one year after the central bank cut rates three times last March at the onset of the COVID-19 pandemic, bringing it to the lowest it can go.

Bill Kelly is the host of the Bill Kelly Show on Global News Radio 900 CHML.​