We last heard from Macklem in the BOC decision last Wednesday.

Here are his latest comments:

• Restructuring of the Canadian economy and pick-up in productivity will take years

• Transition to new economy could be more painful than we’d like

• Canada needs to lean into structural change to avoid worst-case scenario

• It is hard to differentiate structural change from cyclical fluctuations; we must be careful not to misdiagnose economic weakness

• Bank of Canada is not expecting unemployment rate to trend higher, given how little growth there is in the labor force

• Lowering rates in face of weak economy could stoke inflation if the weakness is due to lower productive capacity rather than a cyclical downturn in demand

• We should see some gradual improvement in labor market in the period ending 2027

• Rise of AI has potential to put economy on higher path and raise standard of living; so far there is little evidence AI is improving productivity

He paints a tough picture but includes an optimistic note on unemployment given changes in immigration.

This article was written by Adam Button at investinglive.com.



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