Bank keeps rates as is as economic growth numbers falter
The labour productivity of Canadian businesses fell by 0.4 per cent in the fourth quarter as output remained steady while the hours worked rose, Statistics Canada said on Wednesday.
Business activity remained unchanged after nine consecutive quarterly increases, according to Reuters. Hours worked in the business sector grew by 0.4 per cent.
Labour costs per unit of output increased by 1.2 per cent, the steepest rate of growth in a year, thanks to higher average compensation per hour worked and lower productivity.
The hours worked climbed in 10 of the 16 main industry sectors, led by agriculture and forestry, construction and wholesale trade.
On a related note, the Bank of Canada held interest rates steady as expected on Wednesday amid a slowing economy and said there was “increased uncertainty” around the timing of future rate increases.
The central bank said it expects the Canadian economy will be weaker in the first half of 2019 than it projected in January, and said it was watching developments in household spending, oil markets and global trade.
The Bank of Canada has raised its rates five times since July 2017, though it has held its overnight interest rate steady at 1.75 percent since October of last year.
It made clear on Wednesday that future hikes were still on the table, but not imminent.