Following a spike in Canada’s unemployment rate last month, one chief investment officer says borrowing costs need to come down to stimulate the economy.
On Friday, Statistics Canada said that November’s labour force survey indicated the jobless rate climbed to the highest level since January of 2017, excluding the COVID-19 pandemic.
Unemployment reached 6.8 per cent last month from 6.5 per cent in October, according to the agency. However, the Canadian economy did add 51,000 jobs in November, with gains coming from full time work as well as the public sector.
“Canada looks pretty weak I think… the headline employment number is a little better but it’s quite a large jump in the unemployment rate. It’s at cycle highs,” David Aspell, the co-CIO at Mount Lucas Management, said in an interview with BNN Bloomberg Friday.
He noted that unemployment has been increasing for over a year, and he encouraged the Bank of Canada to continue lowering borrowing costs ahead of its next interest rate decision next week.
“They’ve (the Bank of Canada) started to cut, and it seems like they need to continue to cut quite, quite aggressively,” Aspell said.
“The way that the Canadian mortgage market works, at least relative to somewhere like the U.S., means that the rate hikes seem like they had more of an impact and slowed things down quicker than the U.S.”
Click the video at the top of this article to watch the full interview with David Aspell.
With files from The Canadian Press.