As both the Bank of Canada and the IMF have now reported, the Canadian economic recovery slowed in early 2013. Sadly, this contains good news.
A return to economic strength would bring an increase in interest rates. This would cause Canadian households deeply in debt to dig down even deeper to make ends meet. With weakness, rate hikes are likely delayed until 2014.
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The glaring contrast between employment numbers, and the unemployment rate, was highlighted by last week's labour force numbers from Statistics Canada (capably dissected elsewhere on this blog by Angella MacEwan).
Paid employment (i.e. employees) declined by 46,000. Total employment (including self-employment) fell by 22,000. Yet the unemployment rate fell to 7 per cent -- its lowest level since late 2008.
Fewer people were working, yet the unemployment rate declined. What gives?