Bank of Canada Says Low Hire, Low Fire Job Market Breeds Inertia

Bank of Canada External Deputy Governor Nicolas Vincent says the country’s labor market is undergoing structural change — as evidenced by its “low hire, low fire” environment — that will complicate monetary policy decisions.

In a speech in Montreal on Tuesday, Vincent highlighted three major trends in the job market that suggest it’s experiencing more than a short-term slowdown: low turnover, rising long-term unemployment and youth struggling to find work.

Vincent warned the central bank’s ability to help the economy during periods of structural change is limited, and that juicing demand through rate cuts could fuel inflationary pressures.

“While monetary ...