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Nearly 2 million Canadian jobs vanished in April because of COVID-19

08 May 2020 Arlene Kish, M.A.

Given the daily deluge of information over the past month, growing deterioration of Canada's labour market was expected. April was the first full month reflecting the impact of the coronavirus disease 2019 (COVID-19) virus on the labour market. The job losses were substantial in both goods-producing (down 620,500) and services-producing (down 1,373,300) industries. Monthly job losses were massive across most industries within the month. Given the nature of some essential businesses, employment in utilities was unchanged and job losses in agriculture (down 11,200); public administration (down 18,500); finance, insurance, and real estate (down 23,100); natural resources (down 28,600); and education (down 34,400) were relatively mild.

Since the beginning of the COVID-19 pandemic, the jobless rate has more than doubled for adult men and women and almost tripled for youths. When taking into consideration individuals who were not counted as unemployed for specific reasons from the COVID-19 shutdown, Canada's jobless rate would be higher, at 17.8%. Total average hourly wages climbed in the month, leaping 10.9% year on year (y/y), and average usual weekly hours worked climbed 0.8% y/y as fewer part-time workers and lower wages dropped out of those calculations. However, total actual hours worked plunged 14.9% month on month (m/m), which is like the 15.1% m/m drop in March.

Job losses have been horrifically swift snce February across Canada. Each province registered drops in employment greater than 9% m/m in April. Quebec led the country in job losses as employment declined 13.5% m/m. Saskatchewan had the smallest job decrease, down 9.4% m/m. Quebec now leads the country with the highest unemployment rate, at 17%.

The initial phases of reopening the economy are beginning in May in various provinces. Based on provincial announcements, the resumption of activities related to non-emergency surgeries, garden centres, car washes, and golf ranges and the reopening of some residential construction sites in Quebec, for example, are the tiny green shoots that should eventually result in a decline in temporarily laid-off workers as well as increase worked hours for those who were still on payrolls, but worked no hours. The job recovery will be slow and long.

Bottom line

  • Canada's job market was devastated once again with a 1,993,800 nosedive in net employment, which was weaker than IHS Markit expectations.
  • The monthly decrease in full-time (down 1,472,000) positions was far greater than that in part-time (down 521,900) positions.
  • The labour force participation rate declined 3.7 percentage points to 59.8% and the jobless rate climbed 5.2 percentage points to an eye-popping 13.0%.
  • Most of the job cuts were in the private sector, with a sizable 1,874,000 decrease. Public-sector payrolls were down 76,800 and there were 43,100 fewer self-employed workers.
  • The job losses over the past two months have been horrific and sharp. The recovery process will be long given the necessary multi-phased approach to reopen the economy while maintaining physical distancing.

Posted 08 May 2020 by Arlene Kish, M.A., Director – Economics, IHS Markit

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