Monday, August 24, 2009

Canada, recovery and jobs

Canada gets jobs with its economic recovery. No fair
by Barbara Kiviat

The Curious Capitalist

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.