Chapter 6 Blog
The CanWest News Service had an article titled Canada’s economy created 9300 jobs in May, lower than expected, published on Saturday, June 09, 2007.
The article talks about Canada’s unemployment rate still remained at a 33 year low of 6.1 per cent in May even though the economy created 9300 jobs last month, which was lower than expected (Analysts’ forecasts for job creation in May had ranged from 5000 to 23000). Statistics Canada stated “Construction, information, culture and recreation, and accommodation and food services have been the main source of employment growth in Canada since the beginning of 2007.” While these three industries also buoyed in May, the trade sector and the goods manufacturing sector discouraged employment growth. This could also have an impact on wheather the Bank of Canada boosts interest rates in June. But Douglas Porter, deputy chief economist at BMO Capital Markets, believes that the result is not enough on its own to keep the bank from raising rates. The chief economics strategists at TD Securities, Marc Levesque said the real surprise was the lost of 6400 jobs in the service sector last month. He believes this sector should be standing as one of the stronger sectors in the current BC economy.
Connections to Chapter 6:In chapter 6, we learned about multipliers and their effects, AD/AS and GDP. If the Bank of Canada is going to raise interests rates, reducing the spending in Canada (lower aggregate demand) and increase savings. On the other hand, if the Bank is going to stick with the current rate or decrease rate, there will be an increase in spending and less saving, which will increase Aggregate demand, bringing a boom in the economy.
The CanWest News Service had an article titled Canada’s economy created 9300 jobs in May, lower than expected, published on Saturday, June 09, 2007.
The article talks about Canada’s unemployment rate still remained at a 33 year low of 6.1 per cent in May even though the economy created 9300 jobs last month, which was lower than expected (Analysts’ forecasts for job creation in May had ranged from 5000 to 23000). Statistics Canada stated “Construction, information, culture and recreation, and accommodation and food services have been the main source of employment growth in Canada since the beginning of 2007.” While these three industries also buoyed in May, the trade sector and the goods manufacturing sector discouraged employment growth. This could also have an impact on wheather the Bank of Canada boosts interest rates in June. But Douglas Porter, deputy chief economist at BMO Capital Markets, believes that the result is not enough on its own to keep the bank from raising rates. The chief economics strategists at TD Securities, Marc Levesque said the real surprise was the lost of 6400 jobs in the service sector last month. He believes this sector should be standing as one of the stronger sectors in the current BC economy.
Connections to Chapter 6:In chapter 6, we learned about multipliers and their effects, AD/AS and GDP. If the Bank of Canada is going to raise interests rates, reducing the spending in Canada (lower aggregate demand) and increase savings. On the other hand, if the Bank is going to stick with the current rate or decrease rate, there will be an increase in spending and less saving, which will increase Aggregate demand, bringing a boom in the economy.
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