growth, average hours worked, and job - finding rate. the lmi is scaled to be comparable with the unemployment rate, and thus provide a simple benchmark against which to judge whether the unemployment rate is evolving in a manner consistent with broader labour market conditions. see k. zmitrowicz and m. khan, “ beyond the unemployment rate : assessing canadian and u. s. labour markets since the recession, ” bank of canada review ( spring 2014 ) : 42 – 53. increases in involuntary part - time work were observed across age groups and accounted for virtually all of the increase in the share of part - time employment. for additional details on the evolution of labour force participation rates and part - time employment across age groups and regions, see c. cheung, d. granovsky and g. velasco, “ changing labour market participation since the great recession : a regional perspective, ” discussion paper no. 2015 – 2, bank of canada, february 2015. l. b. kahn and e. mcentarfer, “ employment cyclicality and firm quality, ” nber working paper no. 20698, november 2014. p. diamond and a. sahin, “ shifts in the beveridge curve, ” federal reserve bank of new york staff report no. 687, august 2014. t. lane, “ drilling down – understanding oil prices and their economic impact ” ( speech to madison international trade association, madison, wisconsin, 13 january 2015 ). bis central bankers ’ speeches $ 60 per barrel and monetary policy did not respond, gross domestic income would be about 4 1 / 2 per cent lower by the end of 2016. 13 that would affect incomes of canadians. while some regions will clearly bear more of the brunt than others, the impact will be felt across the country. nearly one - third of the goods and services purchased by the alberta energy industry are drawn from other provinces – and so are the workers. 14 lower incomes would also lead to an increase in household imbalances. we laid all this out in our january monetary policy report. many of the negative effects of lower oil prices on growth happen swiftly. energy - related firms are already paring back investment and hiring intentions. we expect capital investment in the oil and gas sector to fall by about 30 per cent in 2015. this is huge given the importance of investment in this sector for overall growth. current spot prices are below fullcycle break - even cost estimates for most oil sands projects, which can

canada ’ s economy, ” the conference board of canada, 20 january 2015. the conference board estimates that about $ 375 million in income from fly - in - fly - out workers accrued to atlantic canadians in 2014. see p. antunes and k. beckman, “ regional shake up : the impact of lower oil prices on canada ’ s economy, ” the conference board of canada, 20 january 2015. we estimate that the excess supply is about 1. 0 to 2. 0 per cent at the global level. bis central bankers ’ speeches labour market conditions are not any better, with unemployment rates often above 10 per cent. so, labour gaps are significant. in some places, we are seeing long - term unemployment, involuntary part - time work, and other indicators of hysteretic effects in labour markets. 18 it ’ s no surprise, then, that real wage growth has stagnated. the share of income that is going to labour has been falling, continuing a trend that started three decades ago ( chart 6 ). the decline implies that more income is going to those with a higher savings rate. so they aren ’ t spending the income. fortunately, lower oil prices are providing some offset by putting money back in people ’ s wallets. overall, lower oil prices will boost global economic growth, particularly in the united states and china, canada ’ s major trading partners. so, we ’ ve talked about growth. let ’ s turn now to the effect that the drop in oil prices is having on inflation. lower headline inflation increases the risk that inflation expectations become unanchored, particularly in the euro area, where inflation forecasts have been revised down ( chart 7 ). clearly, monetary policy actions taken by the european central bank and other central banks around the globe will help to anchor inflation expectations. canada has a very open economy, so the boost in world growth is good for us. global inflation or disinflation trends matter, too. our work shows that up to a quarter of the variance in core inflation in canada can be explained by a common global factor. that is, developments that affect inflation at the global level can have an impact on inflation here at home. fuel in the tank now, let me turn to what this means for monetary policy. in the days leading up to our policy decision on 21 january, we considered the implications of the fall in oil prices and whether our policy rate of 1 per cent was still appropriate. monetary policy was already st