Home > Commercial Real Estate News, Market Info & Statistics > Canada – Rate hike in 2013 unlikely despite strong jobs report | #cre #ccim #sior

Canada – Rate hike in 2013 unlikely despite strong jobs report | #cre #ccim #sior


canadaletter gif large

Provincial spending cuts are likely to derail market expectations calling for a rate hike in 2013, say NBF economists

By James Langton | January 07, 2013 17:20

Last week’s surprisingly strong jobs report last week has raised expectations that the Bank of Canada may raise interest rates this year, but National Bank Financial economists caution that rate hikes may not be imminent just yet.

In a new research note, NBF reports that more than 300,000 net new jobs were added in Canada in calendar 2012. And, it says that Canada’s stellar December employment report, in particular, “has led to a significant increase in rate hike expectations” for 2013.

It reports that the NBF fixed income derivatives group estimates that the market is pricing an 80% probability that the Bank of Canada will pull the trigger at least once in 2013.

However, it expects the upcoming provincial budget season will derail market expectations calling for a rate hike in 2013.

It says about 44% of the 2012 employment increase was accounted for by Quebec, which recorded its best job creation year since 2002; and, about 75% of the jobs created in Quebec were in health & social services and in education, which, it says, are, “sectors that were recently earmarked for spending caps in the November budget.”

Moreover, it expects other provinces to introduce similar spending restrictions in their respective incoming budgets too. “This could be quite significant for labour markets since public sector jobs accounted for a whopping 48% of total employment created in the rest of Canada in 2012,” it says, noting that the public sector normally accounts for 20% of total employment

Economy & Markets – Rate hike in 2013 unlikely despite strong jobs report – Article – investmentexecutive.com.

Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: