OTTAWA — Rapid population growth is challenging economists' understanding of the economy as they monitor how businesses and consumers are responding to high interest rates.
BMO chief economist Douglas Porter said the strong population growth is making economists like himself reconsider what a normal monthly jobs report should look like. Before the pandemic, the Canadian economy would add 10,000 to 15,000 jobs in a typical month, he said. "Employment levels are going to be increasing a lot, just because we're adding a lot of people to the population. But I don't think that tells us necessarily very much about the health of labour markets," Skuterud said.
"We should also be at least somewhat keeping in mind what the underlying growth rate of the population is before we get all excited about two per cent growth, and it's the population is growing at two per cent. It's really not impressive," Porter said. But Royce Mendes, managing director and head of macro strategy at Desjardins, argues that population growth is interfering with the Bank of Canada's efforts by propping up demand in the housing market.
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