A tight labour market and elevated savings during the pandemic will cushion the impact of a recession on Canadians, says a new report from Deloitte.
However, because the job market has been so tight, Deloitte chief economist Craig Alexander said unemployment might not rise as much as it typically would during a recession.“Nobody eats GDP. From a point of view of Canadians, what really matters is what happens to their jobs and their income,” Alexander said.
“If a recession hits, [businesses] are likely to still want to hoard labour because of how difficult it has been to find workers that have the skills that they need,” he said. As the Bank of Canada works on bringing the inflation rate down to its two per cent target, higher interest rates will feed into higher borrowing costs, which should slow economic activity.
Source: News Formal (newsformal.com)
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