OECD report projects Canadian jobless rate to fall to 6.7 per cent by end of 2014
PARIS—Unemployment rates in Canada and the United States will fall significantly by the end of next year but the overall rate among some of the world’s advanced economies will remain high, the OECD forecasts in a new report.
For the 34-country Organization for Economic Co-operation and Devepment, overall unemployment is projected to fall slightly next year to 7.8 per cent from eight per cent.
In Canada, which weathered the latest recession better than many other advanced countries, the unemployment rate was 7.1 per cent in the first quarter of this year and is projected to fall to 6.7 per cent by the end of 2014.
The OECD says Canada continues to outpace many other member countries but it hasn’t completely recovered from the 2008-09 financial crisis, when the national unemployment rate was 6.1 per cent.
It also notes that the share of long-term unemployed, who have without a job for a year or more, has nearly doubled in Canada since the beginning of the recession.
“The number of short-term unemployed grew rapidly early in the recession, when many workers were laid-off, and then receded as workers either found jobs in the recovering labour market or fell into long-term unemployment,” the OECD says.
“By contrast, the number of long-term unemployed has yet to decline.”
It said a possible reason that the long-term unemployed have been so slow to benefit from the recovery is that employers often “prefer to hire new labour market entrants and the short-term unemployed.”
In addition to Canada, the U.S. will see unemployment fall significantly by the end of next year and Germany will improve on its already low unemployment rate, according to the Paris-based organization.
It projects the U.S. unemployment rate will fall to 6.7 per cent by the end of 2014, from 7.6 per cent at the end of June and from a post-recession peak near 10 per cent in the fall of 2009.
In Germany, Europe’s strongest economy, the unemployment rate was 5.3 per cent in May and is expected to decline further next year, the report says.
The OECD is forecasting that the jobless rate for the countries that use the euro will rise from 12.2 per cent to 12.3 per cent by the end of next year, but many countries, like Greece, Spain and Portugal, will see a much sharper increase.
The OECD says young people and low-skilled workers have borne the brunt of the crisis.
—with files from The Associated Press