When will the Bank of Canada hike rates next? Experts weigh in

When will the Bank of Canada hike rates next? Experts weigh in

When will the Bank of Canada hike rates next? Experts weigh in

The national unemployment rate fell to its lowest level in more than 40 years last month as the country closed out a year that saw it produce jobs at a pace not seen since 2002. The unemployment rate was 8.9 per cent in December 2016.

According to data from Statistics Canada, the December unemployment rate dropped to 5.7 per cent nationally, its lowest mark since comparable data became available in 1976. For homeowners with fixed-rate mortgages, a hike won't change much (at least until their mortgage comes up for renewal.) But for those with variable-rate mortgages - which move up and down with interest rates - payments will go up.

The central bank raised its benchmark interest rate for the first time in seven years in July and then again in September, putting it at 1 per cent. Money markets expect three further rate hikes this year.

"Maybe the weak Canadian dollar can explain some of the traded sector's growth", said Jia. "If that report flags tightening capacity and broadening labour shortages, the Bank may not wait until March to raise rates".

"The books closed on a phenomenal year for Canadian employment with another spectacular result for December", CIBC economist Nick Exarhos wrote in a brief report.

The unemployment rate in Kitchener-Waterloo fell to 4.9 per cent, but only because of a 2,100-worker drop in the local labour force.

The U.S. dollar pared gains against a basket of major currencies on Friday after data showed the U.S. economy created fewer jobs than expected in December. The number of public-sector employees rose by 2.3 per cent compared to a 1.8 per cent increase in paid positions in the private sector.

The data revealed most of the job gains in 2017 came from industries related to the real estate market, such as construction, insurance, finance, rental and leasing.

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