Along with the decrease in unemployment rates, it seems that Canadians are putting more hours in at the workplace. While there was a dip in in the growth of working hours early on in the years; the number went right back up and grew by 3% as recorded over the course of the year. According to Scotiabank, since November 2003, this is the fastest uptick in job productivity hours for Canadians on the whole. The significance of increasing working hours is linked to wage growth in the future.
As hoped for, there is an uptick in hourly wage growth; December of 2017 saw a wage growth of 2.7% according to a year-over-year basis. Economists had been concerned about negligible wage growth in Canada; early last year but that’s a thing of the past for now. It is expected that a series of increases to provincial minimum wage rates will further accelerate wage growth. Wage growth in combination with an increase in working hours as reported earlier; may lead to inflationary pressures but its still good news for working Canadians.
Scotiabank has already gone ahead and made changes to its forecast for interest rates and is prodding the Central Bank Scotiabank to go ahead and hike interest rates in the latter half of the month.
Additional interest rate hikes could finally crash the housing market and cause further trouble for mortgage holders overwhelmed by debt. However; according to Derek Holt, an economist with Scotiabank, the outlook is optimistic.
Holt wrote in a report that increased incomes will soften the blow of higher interest rates for Canadians in debt. Significant data released today show that higher incomes could minimize the burden of households that are expected to put a bigger chunk of their incomes into paying soon to be hiked interest rates.
