The recovery of Canada’s labour market is well under way, according to a report from the Organisation for Economic Co-operation and Development (OECD).
The unemployment rate (as defined by the International Labour Organization) fell by more than one percentage point to 7.2 per cent in June 2012, since peaking at 8.5 per cent in the third quarter of 2009.
In comparison, the unemployment rate for the OECD area was 7.9 per cent in May 2012, according to the 2012 OECD Employment Outlook.
The recovery will gain strength in Canada and its unemployment rate is expected to decline further to 6.4 per cent by late 2013, close to its pre-crisis level. This compares to a forecast OECD average of 7.7 per cent in late 2013.
The current weak economic recovery will keep unemployment rates in OECD countries high until at least the end of 2013, according to the report. There are about 48 million people out of work across the OECD.
The situation varies widely between countries. Unemployment has been rising in the European Union since the end of 2011, but has been stable at around 8.25 per cent in the United States. In OECD countries, the unemployment rate was highest in Spain, at 24.6 per cent, with double-digit rates also in Estonia, France, Greece, Hungary, Ireland, Italy, Portugal and the Slovak Republic.
In most key emerging economies, with the exception of South Africa, labour markets have weathered the crisis well, said OECD. But there have been recent signs of a slowdown in the rapid pace of economic and employment growth in some, notably Brazil, China and India.
Long-term unemployment has risen since the start of the crisis in the OECD area, with around one in three unemployed out of work for 12 months or more. The share of long-term unemployed remains highest in EU countries, at around 44 per cent on average. But also in the U.S., the share of people out of work for 12 months or more has soared, from 10 per cent pre-crisis to around 30 per cent today.
And the number of people out of work for two years or more in the OECD area has grown by 2.6 million since 2007 to reach 7.8 million in 2011, said the report.
“The recent deterioriation in the economic outlook is very bad news for the labour market,” said OECD secretary-general Angel Gurría. “It is imperative that governments use every possible means at their disposal to help jobseekers, especially young people, by removing barriers to job creation and investing in their education and skills. The young are at most risk of long-term damage to their careers and livelihoods. Targeting the most cost-effective policies is essential.”
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