Is the current unemployment rate of Canada close to NAIRU Hi

Is the current unemployment rate of Canada close to NAIRU? Higher or lower?

Solution

Answer:

The current unemployment rate of Canada is higher than the NAIRU (Non-Accelerating Inflation Rate of Unemployment). The NAIRU shows the state of unemployment and inflation in the economy and their impact on the growth of economy.

The current unemployment rate is 5.8 % in Canada while the inflation rate is 2.2%. To bring the inflation rate down it is needed to increase employment opportunities to improve the percentage of labour force in the economy.