In Canada, immigration was initially hampered by the pandemic, but it is now improving along with rising labour force participation of women. We’ll be watching a broad set of indicators to gauge the balance in the labour market and how it is adjusting to tighter monetary policy. Inflation With demand moderating both globally and here in Canada, inflation has declined.
Annual consumer price index (CPI) inflation eased to 6.3% in 2 See Bank of Canada, “Labour market recovery from COVID-19,” for more details. -8-  December from its peak of 8.1% in June. This is a welcome development, but inflation is still too high. So far, the decline in inflation mostly reflects lower prices for energy, particularly for gasoline.