Hundreds of thousands of jobs have been lost, and interest rates have been cut to historic lows. What's needed to drive the recovery?
Employment has plunged over the past year. The recession has killed hundreds of thousands of jobs in Canada since employment peaked last October, with the jobless rate hitting an 11-year high of 8.7 per cent. More than 1.6 million Canadians are now out of work, with the steepest job losses among factory workers, though no sector has been spared.
The Bank of Canada began chopping its benchmark overnight lending rate last October as the recession took hold. After six cuts in a row, the key rate sits at 0.25 per cent, the lowest since the central bank was founded in the mid-1930s.
“There is a shift in global growth that is going on and is likely to persist for some time,” Bank of Canada Governor Mark Carney said. “That requires hard thinking by Canadian businesses.”
(Ryan Remiorz/Ryan Remiorz/The Canadian Press)
Canadian consumers are more optimistic about their current finances, a Conference Board of Canada report shows. Its consumer confidence index rose for the seventh month in a row, with more people saying they would feel more comfortable making a major purchase, and are more optimistic about employment. A real pickup in consumer spending, though, may rest on a sustained rebound in the labour market.