THE LABOUR MARKET the rennie brief
WHAT YOU NEED TO KNOW: COVID-19 & THE IMPACT ON CANADIAN JOBS • After shedding 3 million jobs in March and April, Canada added close to 300,000 jobs in May—the largest single-month increase on record • BC added more than 43,000 jobs in May, while Metro Vancouver lost 8,500 • The growth in BC’s employment was largely seen in full-time job positions; in the re-opening of retail, food, and accommodation; and among younger workers • The labour market still has a long path to recovery, with BC’s unemployment rate rising to 13.4% and Metro Vancouver’s to 14.1% as more people sought employment in May
9 JUNE 2020
While the gains were uneven geographically and sectorally, the addition of 300K jobs in May provided some good news for Canada’s economy in the wake of our COVID-19 suppression.
In spite of BC’s gains, Metro Vancouver lost another 8,500 jobs in May—though it was a far cry from the 256,400 lost jobs in March and April combined. THE REALITY While seemingly paradoxical, the country’s unemployment rate actually rose in May (to 13.7%, up from 13% in April) despite the addition of almost 290,000 jobs. This is because the number of people looking for work increased faster than the rate of employment growth. Much of this was due to recent grads and other students (re-)entering the job market. BC’s and Metro Vancouver’s unemployment rates also rose, to 13.4% and 14.1%, respectively. Each of these unemployment rates is at a level not seen since in a generation, with employment counts sitting at their pre- Great Recession levels. LOOKING AHEAD Despite our obviously challenging economic circumstances, there are a number of things to feel good about following May’s data release. First and foremost is that the enormous and swift responses by federal and provincial governments, supplemented by an “all-in” approach by the Bank of Canada, seem to have mitigated some of the economic fallout from COVID-19. If economists’ consensus predictions about the May jobs data are any indication (hint: they were way, way off, expecting as they were further declines), we would be wise to remain prudent when making any definitive statements about the expected performance of our economy or labour market in the near-term. However, it is possible that we have found the bottom of our so- called Great Suppression. Of course, much remains to be determined as we slowly restart our economy, open up our communities, and embark on our path to recovery.
THE GOOD Following two months of unprecedented declines in employment, Canada’s workforce grew by 289,600 jobs in May—the largest monthly increase ever recorded in this country (and almost three times the second-largest increase of 99,600 jobs, in November 2018). Gains were not uniform across the country however, with Ontario having yet to take significant steps towards re- opening its economy and shedding another 64,500 jobs. After losing almost 400,000 jobs in March and April, British Columbia added 43,300 jobs last month as it entered Phase 2 of its COVID-reopening plan. Full-time employment led this transition in BC as the number of part-time positions dipped slightly. Additionally, more than half (52%) of the job growth was in sectors that had been hit hardest in March and April, namely retail and accommodation & food services, as well as education. Another encouraging sign is that almost half (49%) of May’s employment increase in BC was the result of young people (those under 30) returning to work. With this age group having experienced significant job attrition during the prior two months, this was welcome news. THE BAD While our perspective on the May jobs data is one of encouraging signs (mixed with some relief and still some trepidation), it is notable that 80% of the Canadian job additions last month were in Quebec alone. And as mentioned above, Ontario—with the country’s largest population and economy—experienced its third consecutive monthly decline in employment in May, losing another 64,500 jobs and bringing its three-month running total to almost 1.2 million job losses.
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