- Bank of Canada Holds Interest Rates Steady
- Fed’s Beige Report Released
- U.S. Posts Record 10.9 Million Job Openings
Bank of Canada Holds Interest Rates Steady
The Bank of Canada kept its key interest rate goal unchanged on Wednesday, warning that the fourth wave of the pandemic, as well as supply bottlenecks, might hinder the recovery.
The central bank kept its overnight rate target at 0.25 percent, or the effective lower bound and said it will continue to buy bonds at a target rate of $2 billion per week as part of its quantitative easing program.
“The governing council judges that the Canadian economy still has considerable excess capacity, and that the recovery continues to require extraordinary monetary policy support,” the bank said in its decision.
The country’s gross domestic product — the entire value of all goods and services sold — fell in the second quarter, according to Statistics Canada.
The Bank of Canada expects the economy to grow in the second half of the year, while the fourth wave of the COVID-19 epidemic and continued supply-chain problems might slow the country’s recovery.
The Bank of Canada’s next interest rate decision is set for Oct. 27, when it will also release its fall monetary policy report, which will include an update on the economy and inflation.
Fed’s Beige Book Report Released
The Fed published the August issue of the Beige Book report, which includes assessments of the current situation in the American economy.
The US Federal Reserve (Fed) reported that economic growth slowed slightly to a moderate pace in the period from the beginning of July to August. The report said that the slowdown in economic activity can be attributed to the decline in the food, travel, and tourism sectors in most regions, reflecting safety concerns largely stemming from the spread of the Delta variant in the new type of coronavirus (Covid-19) epidemic.
The report pointed out that the other sectors in the economy where growth slowed were those with supply and labor shortages. Also according to the report, growth in non-auto retail sales slowed slightly in some regions.
“Looking ahead, businesses in most regions remained optimistic about near-term prospects, despite widespread concerns about continued supply disruptions and resource shortages,” the Fed’s report said.
In the report, it was stated that in some regions, return to work was delayed due to the increase in the Delta variant, and an increase in wages was reported in some regions.
U.S. Posts Record 10.9 Million Job Openings
According to the Bureau of Labor Statistics, the number of job opportunities in the United States reached a new high in July, following a record showing in June. Even as the economy struggles to add jobs back after the pandemic, demand for workers remains strong, a worrying indicator for the labor market’s already sluggish recovery.
At the end of July, there were 10.9 million job openings from a high of 10.1 million at the end of June. Hiring increased as states reopened and Covid-19-related regulations were relaxed. Job creation was most abundant in the previously hardest-hit industries. The industries with the most job opportunities were healthcare, finance, insurance, food services, and lodging.
In July, over 4 million people, or 2.7 percent, left their jobs, essentially unchanged from June, while the rate of layoffs remained stable at around 1%. With so many job openings, it’s difficult to keep employees. Workers who perceive all of the available options and feel comfortable and confident in resigning their employment to find a better one.
Goldman Sachs, a top-tier investment bank, predicts that the job growth trend will continue.