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It’s sad to say, but a higher unemployment rate, lower wage increases and a frosty spring for housing would be helpful to the process of lowering interest rates for borrowers.

Where we are today in the economy is a case study in the toxicity of inflation. People with mortgages, credit lines and loans are staggering under the weight of high rates that won’t ease until inflation pulls back. On Wednesday, the Bank of Canada reaffirmed its view that we’re not there yet. Rates must hold at today’s high levels for a while longer, in part because there’s too much good economic news.

The inflation rate has gradually declined to 5.2 per cent since hitting a peak for this cycle of 8.1 per cent last June. One of the big sticking points in getting inflation down to the 1- to 3-per-cent level preferred by the Bank of Canada is the job market. It’s too buoyant.

Live updates: Bank of Canada holds key interest rate steady at 4.5%

If we had to pick one economic variable that supports success in your personal finances, it’s a strong job market. Job security is foundational. Even better is a low unemployment rate that feeds demand for workers and thereby increases wages and opportunities for career advancement.

That’s what we have now. The March unemployment rate was 5 per cent, which is close to the lowest we’ve seen in about 50 years. Average hourly wages rose 5.3 per cent in March over the same month of 2022, which beats inflation by a tiny increment.

If you think that’s nothing, try flashing back to April, 2022. The average monthly wage rose just 3.3 per cent while inflation hit 6.8 per cent. On an after-inflation basis, the average hourly wage fell 3.5 per cent.

Wage increases that keep pace with or exceed inflation help you at least tread water financially. But they also feed inflation in a way that gets right up in the Bank of Canada’s grill. Employers who pay more must charge more for their products and services, which means higher prices. Those higher prices in turn influence workers to ask for large pay hikes.

High interest rates have increased the cost of mortgages and triggered a big decline in home prices from the peak level of early last year. But the bad news coming out of the housing market has eased off lately.

The summary view on the performance of Vancouver housing in March: stronger than expected. In Toronto, the furnace room for overheated housing in recent years, the average March sale price was above the average list price for the first time since last May. With a dearth of homes for sale, competition among buyers has heated up to the point where bidding wars are making a comeback.

If you’re trying to get into the housing market for the first time, this is discouraging. But a market rebound would make existing owners happy, especially those who bought at the peak and have been second-guessing themselves ever since and boomers hoping to extract maximum equity from their homes before they downsize.

Robert McLister: What’s keeping interest - and mortgage - rates high? Unemployment near historical lows

We won’t get lower interest rates if housing catches a wave this spring and prices rise sharply. In fact, a resurgent housing market could be used as an argument for higher rates. For that matter, so could a stronger job market.

Among economists, the consensus seems to be that the cumulative effect of last year’s interest rate hikes will hit hard at some point in 2023 and give the Bank of Canada the conditions it needs to lower rates.

Once again, we’re reminded here of how inflation disrupts the economy. Good news like strong wage growth is actually bad if you’re an overstretched borrower because it delays rate cuts. And bad news such as rising unemployment and debt defaults is actually good, in a twisted way, because it clears the way for lower rates.

The ideal outcome would be a slowdown in the economy that falls short of a recession yet cools the job market and keeps housing in check. Unfortunately, getting where we need to go means having to say goodbye to some of today’s biggest wins in personal finance.

Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.

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