The policy consensus that has guided economic decision-making for decades is being challenged like never before. In a new series, the Financial Post explores the opportunities and unknown costs of the Great Rethink.
It’s a source of some homegrown pride that Canada had a better 2008 crisis than the United States.
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The U.S. entered the Great Recession with a lower jobless rate — five per cent in January, according to the Bureau of Labor Statistics, compared with 5.8 per cent in Canada, according to Statistics Canada’s comparable measure of unemployment — but fortunes reversed in June, as the global financial system started to tremble.
Canada then enjoyed an extended run of stronger employment that lasted until the end of 2014, when oil prices collapsed, sending the economy tumbling towards a recession. The U.S. unemployment rate has mostly been lower ever since.
But if you stare at those numbers long enough, you notice something else. Canada’s jobless rate — the one adjusted to match American statistical methods — was 4.8 per cent in autumn of 2008, an impressive number and one it wouldn’t return to for another nine years. The unemployment rate peaked at eight per cent, and then trundled lower for the better part of the decade before it found a new trough.