Bank of Canada warns of ‘low-hire, low-fire’ job market that complicates rate decisions
The Bank of Canada has indicated that the labor market is experiencing a significant structural change, resulting in a 'low-hire, low-fire' environment. This situation complicates the central bank's ability to make informed decisions regarding interest rates, as traditional responses to unemployment may not be effective. The bank is particularly concerned about rising long-term unemployment and the challenges faced by younger workers in finding jobs.
- ▪The ability to find a job in Canada is at its lowest point in 30 years.
- ▪The unemployment rate has increased from 5 percent at the end of 2022 to a peak of 7.1 percent last fall.
- ▪Employers are hiring less frequently, leading to a sense of inertia in the job market.
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Open this photo in gallery:The ability to find a job 'is close to its lowest point in 30 years,' Bank of Canada external deputy governor Nicolas Vincent said Tuesday.Sean Kilpatrick/The Canadian PressShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountThe Bank of Canada is warning that the country’s labour market is undergoing a structural change, creating a “low-hire, low-fire” environment that makes it more difficult to conduct monetary policy.Prolonged, lacklustre conditions in the job market may lead to lasting damage to workers’ prospects, according to the central bank, and complicate its decision-making on interest rates.In a Tuesday morning speech to policymakers and researchers at a Montreal-based think-tank, the Centre Interuniversitaire de Recherche…
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