With the number of people going to collect unemployment checks on the rise—despite other good economic news—one starts to wonder, Could this be our third “jobless recovery” in a row?
Well, not in Canada. As this recent report (PDF) from CIBC World Markets points out, our northern neighbor isn’t having nearly the unemployment issues that we are here in the States. At 8.6%, the unemployment rate is Canada higher than it’s been in a decade, and not terribly below the U.S.’s 9.4%. But—in a big point of difference—people who lose their jobs in Canada are able to find new ones much more quickly.
Long-term unemployment has become a real problem in the U.S. The average unemployed person now spends 25 weeks out of work—a full seven weeks longer than before the recession started. In Canada, by contrast, the average length of unemployment is 15 weeks, just a smidgen above the pre-recession average of 14 weeks.
What gives? According to Benjamin Tal, a senior economist at CIBC, the discrepancy is a sign that Canada’s recession overall has been less severe. Households took on less debt, corporations held on to more cash—Canadians are just kind of better than us (my words, not his).
Or maybe it’s not that simple. Some provinces are seeing people stay unemployed longer. Ontario and Quebec are prime examples. Alberta and British Columbia, meanwhile, speak to the broader trend of getting back to work quickly.
In that juxtaposition you can start to see what’s going on. The part of the country most economically tied to the U.S. is seeing a worse jobs situation than the part of the country more tied to China (by way of the commodities trade).
The Great Recession is largely—let’s face it—an American-made export. Yet in recent years, the Canadian economy has been “divorcing itself a little bit from the U.S.” (those are Tal’s words). And that seems like a good thing right about now.
Barbara!