BOC sees gradual recovery

The Bank of Canada is taking a more cautious tone on the recovery, with expectations for a bumpy and gradual road toward full recuperation.

While the central bank is seeing evidence of a quick, initial bounceback in economic activity as provinces reopen, the second stage of recovery will be more “prolonged and uneven,” deputy governor Lawrence Schembri said in a speech to the Greater Saskatoon Chamber of Commerce. “The uncertainty around this recuperation stage is extraordinary and points toward a recovery that will be gradual and long-lasting as this uncertainty slowly dissipates and household confidence is restored,” Schembri said in the remarks delivered by video-conference.

“In the meantime, households are likely to remain cautious in their spending behaviour as they adjust to a new ‘post-pandemic’ normal.”

As a result of less money flow, employment and income will take time to recover fully. Recent data show hopeful signs for the labour market as job postings have picked up and employment rose.

Still, Schembri said there are more persistent disruptions in the job market that could slow the recovery in the second phase, such as permanent layoffs among those in oil-producing regions.