Canada’s unemployment rate has dropped to 6.5 per cent, the lowest since October 2008, and the main driver was 45,500 people leaving the workforce — with half of those being youth who have given up looking for work.
Canada added only 3,200 jobs during the month (mostly part-time) and annual wage increases fell to 0.7 per cent, the lowest dating back to the late 1990s.
Conversely in the U.S., a surprising employment gain in April of 211,000 new jobs and unemployment fell to 4.4 per cent, the lowest level since May 2007.
All important wage growth rose 2.5 per cent from a year earlier, a positive sign for the U.S. economy.
To continue economic growth, the U.S. has to lure more people into the work force, whereas Canada has to put the unemployed back to work, particularly younger workers.
Look for U.S. interest rates to go up next month and for Canadian rates to go unchanged for the foreseeable future.