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Speech by Bank of Canada Governor Tiff Macklem

James Orlando, CFA, Director & Senior Economist | 416-413-3180

Date Published: November 10, 2022


Bank of Canada Governor Reinforces Need for Labour Market Balance  

  • Bank of Canada Governor Tiff Macklem spoke at today's Public Policy Forum in Toronto. In his speech entitled "The Evolution of Canadian Labour Markets", the Governor made efforts to reinforce the need to rebalance the labour market. 
  • On the current strength of the labour market, he noted "we are in excess demand, where the economy’s need for labour is outpacing its ability to supply it." 
  • On the surprise increase in jobs gained last month, Governor Macklem pivoted to focus on interest rate sensitive sectors, where job growth has been slowing. 
  • On the future path of policy, the Governor didn't reveal too much outside of referencing the need to do more to slow the economy, implying that more tightening is needed.   

Key Implications

  • With the unemployment rate right around historical lows, wages rising, and job vacancies near all-time highs, the BoC's actions thus far have done little to impact the broad labour market. The blowout 108k jobs gain in the October Labour Force Survey further supports this view.
  • As we highlighted in our recent report on job vacancies, the labour market remains hot and it will take considerable cooling in the overall Canadian economy to ease this labour market tightness. This was a major theme of the Governor's presser today. Even though he mentioned that there are pockets of weakness in the labour market, there is a long way to go to restoring balance. This is why markets are expecting more from the BoC over the coming months, with the policy rate expected to reach 4.25% in early 2023.