It seems a terrible thing to cheer about, but a new feeling of gloom may be good for Canadians weighed down by mortgage debt.

A worse-than-expected U.S. jobs report and increasing fears for the state of developing world economies mean that U.S. central banker Janet Yellen may have to once again delay a hike in interest rates.

Fed chair Yellen has repeatedly warned that U.S. interest rates are on the way up. Last month, she delayed that rate rise once again while suggesting the increase could very likely come by the end of this year.

Now a growing number of analysts say a hike in U.S. interest rates will be delayed to 2016 or beyond.

Why U.S. rates matter in Canada

Before going on, I should insert a quick reminder of why U.S. interest rates matter to so many Canadian mortgage holders.

While short-term rates are set by the Bank of Canada, mortgage rates depend on the cost of borrowing money on international bond markets. Before lending long-term cash, Canadian banks like to make sure they can spread the load if rates begin to rise. That means they look to the bond market to set the price of the long-term cash they lend.

When the U.S. Fed rates begin to rise, international bond rates begin to rise as well, and banks must pass along those increased interest interest costs to their customers.

As recently as June, Yellen foresaw not just an autumn rate rise, but her advisers on the Federal Open Markets Committee also suggested that rates would continue to rise at about a whole percentage point each year. In other words, long-term rates that were four per cent this year would be five per cent next and six per cent the year after.

That scenario looks increasingly unlikely. Even if Yellen decided she had to break the ice with a single "one and done" interest rate hike, it is widely expected rates will not rise so quickly as when a recovery seemed imminent.

A man is pictured in front of a financial loans store in downtown Brasilia, Brazil. Suddenly the roaring economies of the developing world have slowed, and there are fears of an enormous credit bubble. (REUTERS)

For now at least, in the admittedly moody world of economic forecasting, a new wave of gloom has crept in. The outlook for the global world of the emerging markets has become even bleaker since Yellen used them as a reason to delay last month's rate hike.

The International Monetary Fund has issued another warning this past week about a weakening global economy, with the emerging markets doing among the worst. The IMF has also predicted a spate of corporate failures in the developing world if U.S. rates were to rise.

A new credit bubble?

Back when it was scheduled, this coming week's meeting of the IMF and World Bank in Lima, Peru, was supposed to be a celebration of emerging market success. Now, according to Gillian Tett writing in the Financial Times, those countries may be facing a huge and dangerous credit bubble, with no obvious way to replace that credit when it begins to deflate.

There is a growing realization that developing world declines will continue to hurt exports in developed economies. Someone has to buy the things that U.S. and Canadian workers make.

Certainly those U.S. job numbers Friday did little to encourage the feeling that the U.S. economy was heading for the kind of boom that can pull the entire world out of its current mire. The jobless rate stayed the same, but job creation was about 60,000 fewer than expected and the participation rate fell to a 48 year low.

Blamed partly on an aging population gradually retiring out of the workforce, a shrinking labour force is a dangerous sign for an economy's future. It is worryingly similar to what has happened in Japan, a country that has stubbornly refused to return to growth. Despite repeated government stimulus plans, this week it appeared Japan could be heading for a technical recession.

All that said, this is the time of year when moods change. Suddenly end-of-summer blues can turn into the optimism of Santa Claus rallies.

If the gloom persists, one of the short-term winners will be Canadian long-term borrowers. But the news may not be so good for those whose businesses depending on a long-awaited economic recovery.