The Bank of Canada and updated its economic outlook in its meeting for the last time in 2021. They made no change to its projection that its rate will rise in the middle of 2022. It said that they are watching the inflation issues closely and they would hold the benchmark rate at .25% until the middle of next year.
As expected Canada’s economy grew in the third quarter of 2021 by around 5.5%. The contributors were high vaccination rates and consumption of goods. They said that inflation will likely remain “elevated” through the first six months of 2022. Inflation is expected to drop towards the Bank of Canada’s target of 2% in the second half of 2022.
While the economy had “considerable momentum” towards the end of the year, the Omicron variant has caused some uncertainty which led to tightened travel restrictions and a decline in oil prices.
The Bank of Canada said that housing activity has been moderating but is regaining strength especially in the resale market. Economic growth may be hampered by the negative effects of Omicron and the floods in BC. They have both been disrupting supply chains and reducing demand for some services. Both a contributing factor to inflation and scarcity of many products. Check out Canadian Mortgage Professionals website for more info.
Canada added 157,000 jobs in September which put us around pre-pandemic levels. These jobs concentrated on full time work with special gains in industries where workers can work from home and among workers between the ages of 25 and 54. The unemployment rate continues its downward trend to 6.9%, the lowest since the onset of the pandemic.
For more details, please visit the Statistics Canada’s website.
