Economic growth – The Bank of Canada has downgraded their economic growth forecast for Canada – from 6.0 per cent to 5.0 per cent for 2021, and from 4.5 per cent to 4.25 per cent for 2022.
Jobs – Total employment has recovered to the level it was at in February 2020, although the job market remains weaker for young workers, women over 55, and those without university degrees. Even though most pandemic restrictions that affected employment have been relaxed or fully removed, employment related to tourism and hospitality remains significantly below pre-pandemic levels.
Wages – While employers in some sectors have made a lot of noise about labour shortages, we haven’t seen wages increase in these sectors to attract more workers. Over the past two years, average wage increases have fallen slightly short of increases in CPI.
Inflation – The overall Consumer Price Index (CPI) increase in October 2021 was 4.7 per cent compared to October 2020, but the Bank’s three measures of core inflation remained lower - between 3.4 per cent and 1.8 per cent. Many of the factors influencing price increases are temporary and global in nature.
Interest rates – The Bank of Canada has indicated that it expects to keep its key lending rate at 0.25 per cent through to the middle of 2022.