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Jan 10, 2025 7:20 PM - Connect Newsroom

Strong Job Growth in Canada Dampens Expectations of Further Interest Rate Cuts

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Statistics Canada said in a report released on Friday that the Canadian economy added 91,000 jobs in December, the largest monthly increase in the past two years. (Photo: The Canadian Press)

Strong job data in Canada's labor market has dampened expectations of further interest rate cuts by the Bank of Canada.

Statistics Canada said in a report released on Friday that the Canadian economy added 91,000 jobs in December, the largest monthly increase in the past two years.

At the same time, the unemployment rate fell to 6.7 percent from 6.8 percent, indicating that the Canadian economy is responding to the Bank of Canada's easing of monetary policy. Following the latest labor market data, financial markets have reduced the likelihood of another rate cut at the Bank of Canada's next meeting on January 29.

Meanwhile, LSEG data shows that it still maintains expectations for interest rate cuts.

The central bank itself has also indicated that it will not reduce the policy rate in upcoming meetings. The bank stated that, if inflation remains under control and the economy stays healthy, interest rates can be allowed to remain stable.

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