Seldom does Canada lose more than 50,000 jobs in one month. That’s why October’s surprise loss of 54,000 has economists rethinking their rate forecasts all over again.
Debate about the need for a BoC rate cut may now grow a little louder, especially if we get another economic bombshell of this sort.
There was no shortage of reaction to Friday’s grim employment data. Here’s a sampling:
“This is an extremely loud warning shot for the economy,”—Doug Porter, economist, BMO(Star)
“Clearly it will discourage the Bank of Canada from raising interest rates for quite some time. If economic conditions deteriorate, it’s possible the Bank would cut interest rates. For the moment, though, we expect steady policy.”—Sal Guatieri, senior economist, BMO Capital Markets (Reuters)
“It is definitely suggesting the economy is slowing. I don’t think it is enough to get the Bank of Canada to cut at this point, but one or two more of these and there is a strong possibility that the bank could start reducing interest rates.”—Sheryl King, head of Canadian economics, Bank of America-Merrill Lynch (Reuters)
“Our expectation that the economy will be able to maintain its momentum and continue to grow at a reasonable clip in 2012 is consistent with the Bank’s next move being a rate hike; although given the current heightened level of uncertainty and prospect of subpar global growth, the first increase is not likely until the third quarter of 2012.”—Dawn Desjardins, Assistant Chief Economist, RBC Economics
Rob McLister, CMT
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