Supply chain problems mean inflation set to be more stubborn By Reuters
Julie Gordon and David Ljunggren
OTTAWA (Reuters] – The global supply chain bottlenecks in the world aren’t easing as fast as we expected. This means inflation in Canada, and IMF members, will take a while to drop, said the Bank of Canada governor on Thursday.
Tiff Macklem said that these issues would weigh on Canada’s short-term recovery. She spoke to reporters following a meeting of the International Monetary Fund in Washington.
The bottlenecks have not been easing as rapidly as anticipated. Macklem spoke of the strong consensus among central bankers that these issues deserve continued attention.
His explanation was that this meant in all countries inflation measures would take longer to fall.
He said that the concern is now that bottlenecks look more complex and persistent than they were previously believed, even though they are still considered temporary.
Macklem sought to discredit public outrage over Macklem’s assertion that the high rate of inflation was temporary. Canada’s August inflation rate rose to 4.1%, which is well above the 2-2% mark of its 1-3% control range.
“Our task is to prevent these price increases from becoming ongoing inflation. These price increases are believed to be one-off. We believe this. He said that they won’t cause ongoing inflation.”
Macklem stated that Canada’s labour market is still lagging despite September’s return to pre-pandemic employment levels.
He said, “It’s an important milestone but not the destination.” “We have seen growth in our labor force… the labor market is still very slack.”
His remarks were directed at young women and men, who said “Job growth was particularly concentrated in those areas that most needed it.” However, low-wage work is well below levels pre-pandemic.
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