Great Graphic: US-Canadian Unit Labor Costs

Unit labor costs integrate wages, benefits and productivity into a single measure and is a useful indicator of international competitiveness. This Great Graphic was on Sober Look.

It shows the evolution of Canada and the US unit labor costs.  One can see the dramatic loss of competitiveness of the Canadian economy is stark and unprecedented.

This is on top of the growing financial imbalances as well emanating from the housing market and household debt.  The positive terms of trade shock and the safe haven provided have either reversed, lessened or negated outright.   The implications for the Canadian dollar are negative (over the longer-term).