The unemployment rate in Canada plunged to its lowest in four decades. This decline has raised the odds of this month’s rate hike by the bank of Canada. By the end of December last year, the rates of unemployment had fallen to 5.7% according to the latest report released on Friday by Statistics Canada in Ottawa. The rates are the lowest data series regarding unemployment rates since 1976. The number of employment opportunities created by the expectations has risen by 76,800 new opportunities. This figure brought the gain in job opportunities for the 2017 financial year to 422,500 which marks the best increase in annual employment opportunities since 2002.
As the 2017 fiscal year came to an end, the Canadian economy displayed unexpected resilience with the indices showing that the slack in the job market was diminishing rapidly. This trend is expected to fasten the pace for the increase of interest rates by the Bank of Canada. In the last quarter of the 2017 financial year which started in September saw an increase in the number of Canadians who had secured a livable wage by 193,400. This is the most significant increase in the number of employment opportunities that have been created within three months.
One of the senior economists of international repute at PNC Financial Services Group in Pittsburg, Pennsylvania, Bill Adams, said that the latest information at hand might support a hike in interest rates. Mr. Adams added that a wide –base growth of the Canadian economy is still dominant in most parts of the country. The Canadian currency and bond yields thrived by the significant job opportunities that are now available to Canadian citizens.
The prices of Canadian bonds plunged on speculation that the high number of employment opportunities created by the economy may trigger the Bank of Canada to hike the interest rates on borrowing as early as January of 2018. The rates increase odds on January 17 during the next meeting by the management of the Bank of Canada soared to 70% up from a mere 40% on Friday this week. This soaring was stimulated by the trends in commerce in the swaps market.
The good news was not just for the Canadian labor market. According to another report by Statistics Canada, the country’s exporters are now recovering from a slump that had lasted for almost a month, and exports consignments had now increased by 3.75 since November last year. This is the most significant increase in export shipments in over one year.