The latest unemployment numbers and rates have been released by Satistics Canada. They show that the rate of unemployment has risen from 6.5 % to 6.6%.Manufaturing lost 41,000 jobs largely in Ontario.Unemployment rose in Quebec to 8.4 % and in Ontario to 6.5 %.Employment was up markedly in public service and administration.The apparent reason for the overall rise in the unemployment rateis that more previously discouraged workers have rejoined the labour force seeking work than the previous month.
Some analysts are foolishly suggesting that this may give the Bank of Canada more ammunition to raise the rates further to cool off the robust economy.
That would be a big mistake.
If I were the Bank of Canada I would not be in the business of raising the rates any further on account of our very strong exchange rate on the dollar vis a vis the US dollar and the growing number of layoffs in the Ontario manufacturing heartland and the persistance of unemployment in industries like soft wood lumber plus the growing evidence of difficulty of people losing jobs in urban areas.
Nairu obsession ought not to mislead our central bankers. The cycle is turning south not north for the moment despite the appearance of more previously discouraged workers in the labour force survey actively seeking work.
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