Bank of Canada governor Tiff Macklem says the economy continues to be overheated and the labour market is simply too tight.
The governor’s comments come after Statistics Canada’s most up-to-date labour force survey revealed the economy added 150,000 jobs last month because the unemployment rate hovers around record lows.
While testifying before the House of Commons finance committee on Thursday, Macklem told MPs the economy is in excess demand, which is putting upward pressure on prices.
That is despite the Bank of Canada aiming to slow the economy and funky inflation by climbing its key rate of interest to 4.5 per cent, the best its been since 2007.
After announcing the central bank will temporarily pause rate of interest hikes last month, Macklem once more stressed on Thursday that he’s ready to boost rates further if inflation proves to be sticky.
Statistics Canada is scheduled to release January inflation data on Tuesday.