The U.S. unemployment rate currently stands close to 1 percentage point above Canada’s and a full 2 percentage points higher when measured on a like-for-like basis. And more than 40 per cent of unemployed U.S. workers have been out of work for more than six months, compared with only 18 per cent of workers in Canada (Chart 7).
Long-term unemployment is particularly worrisome because workers who are out of a job for extended periods lose valuable job skills, making them less employable and more likely to give up looking for work. Indeed, labour market participation in the United States has declined by 2.5 percentage points more than it has in Canada (Chart 8).