OTTAWA (Reuters) - The decline in the jobless rate in the United States overstates the improvement in the labor market there, and to a lesser extent the same may be true in Canada, the Bank of Canada said in a study on Tuesday.
"Although the unemployment rates in both countries are down significantly from the sharp increases seen during the recession, the recovery in labor markets remains incomplete," the central bank study (link.reuters.com/mum39v) asserted.
“For example, an unusually large share of the unemployed have been out of work for six months or more, and many workers who would like to work full time have been able to obtain only part-time employment.”
Canada’s unemployment rate since the Great Recession “seems to have been largely representative of overall labor market conditions although it may have modestly overstated the extent of recent improvement,” the study said.
“The U.S. unemployment rate, in contrast, appears to have substantially overstated the post-recession improvement in labor market conditions.”
Canada’s unemployment rate rose from 5.9 percent in February 2008 to 8.7 percent at the height of the recession in August 2009. Last month it was at 6.9 percent. It would generally come in about a percentage point lower if measured in the same way the U.S. Bureau of Labor Statistics does.
The U.S. rate rose from 4.4 percent in May 2007 to 10 percent in October 2009, dropping back to 6.3 percent last month.
Reporting by Randall Palmer; Editing by Peter Galloway