Canada To Cut Interest Rates Before US As Labor Market Erodes: BMO
The Canadian and US economy are diverging from their typically similar performance. A new research note from BMO warns Canada’s economy is seriously underperforming in contrast to the US, especially when it comes to labor and inflation. This widening divergence likely means Canada will enter a recession and cut rates before the US, where its central bank has even floated the possibility of no rate cuts this year.
Canadian Labor Market Eroding Much Faster Than The US
Canada and the US typically have labor markets that move closely but not these days. The US economy gained 303,000 jobs and saw its unemployment rate fall to just 3.8% last month. Meanwhile in Canada, it lost 2,200 jobs and saw the unemployment rate climb 0.3 points to 6.1% over the same period. According to BMO, the 2.3 point gap for unemployment in both countries is on the high side for anything seen over the past 20 years. ….[Continue Reading]