Economist: Rate hikes making an unmistakable mark on the labour sector
The Bank of Canada’s attempts to curb soaring inflation through a series of outsized rate hikes in recent months has chilled the labour market’s momentum with the estimated loss of 43,200 jobs in June and 30,600 jobs in July, according to veteran economist Sherry Cooper.
“The Canadian economy is slowing in response to the whopping rise in interest rates,” Cooper wrote in a new analysis. “Labour markets across the country are still very tight as massive job vacancies continue, but the market’s tenor (or mood) is shifting.”
And while labour shortages persist in customer-facing sectors like food and hospitality services, “we are also now hearing of layoffs and cutbacks in businesses that boomed during the lockdowns,” Cooper added. “Many of those over-expanded and are currently cutting back. A great Canadian example is Shopify, but the same can be said of major retailers like Walmart and Target, which now find themselves overstocked.”