Oxford Economic Research Institute: Michael Davenport stated that Canada's April employment report confirms a moderate weakness in the labor market, which reduces the likelihood of sustained high inflation due to energy price shocks. The economist believes that the country's economy will have difficulty creating job opportunities in the short term, but after reaching 6.9%, the unemployment rate may have peaked. The balance between job gains and losses has slowed to near zero, and may soon turn negative, meaning that the country's economy does not need to create any job opportunities for the unemployment rate to decrease. Davenport predicts that the unemployment rate will peak at 7% in the second quarter, followed by moderate job creation and a contraction in labor supply, which will begin to lower the unemployment rate. The Canadian labor market indicates a low likelihood of sustained high inflation.
Michael Davenport of the Oxford Economics Institute stated that Canada's April employment report confirms a moderate weakness in the labor market, reducing the likelihood of sustained high inflation due to energy price shocks. The economist believes that the country's economy will have difficulty creating job opportunities in the short term, but after rising to 6.9%, the unemployment rate may have already peaked. The balance of employment growth has slowed to near zero and may soon turn negative, meaning that the country's economy does not need to create any job opportunities for the unemployment rate to decrease. Davenport predicts that the unemployment rate will peak at 7% in the second quarter, after which moderate job creation and a shrinking labor supply will begin to pull down the unemployment rate.
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