Canada Employment vs BoC key interest rate

The unemployment rate is rising not only in the US, but also north of the US border. In Canada, the unemployment rate rose to 6.20% in May (Figure 1).

At the same time, the Bank of Canada has already reduced the interest rate to 5.75% (from 6.00%) - Figure 2.

Nevertheless, the unemployment rate has increased in Canada since the bottom of the cycle by as much as 120 bps (from April 2023), and in the USA by only 60 bps.

Employment growth in both countries is similar - if we compare YoY changes - see 3 and 4.

But inflation in Canada is currently less of a problem compared to the US - see Figure 5 and 6.