Just like in the US, employment became a problem in the last few months in Canada as well, as the country went into lockdown. In fact, adjusted for the population in Canada, the decline in employment was even more severe in certain weeks. The unemployment rate jumped to 13.0%. It increased further in May, but by less than expected, while employment reversed, increasing by 289K last month, against a 500K decline expected.
The May 2020 Canada Employment Report
- May employment +289.6K vs -500.0K expected
- April employment was -1993.8K
- Unemployment rate 13.7% vs 15.0% expected (highest on record)
- April unemployment rate stood at 13.0%
Details:
- Full time +219K vs -1472K prior
- Part time +70.3K vs -521K prior
- Participation rate 61.4% vs 59.8% exp
- Prior participation rate 59.8% (65.5% pre-COVID)
- Hourly wage rate permanent employees +10.0% vs +10.5% exp
- Survey reflects labour market conditions as of the week of May 10 to May 16
- The number of Canadians who wanted to work but did not look for a job remained high in May, falling from 1.5 million in April to 1.4 million
- Including the group who wanted to work but were not looking for work-without distinguishing how recently they last worked-would result in an adjusted unemployment rate of 19.6% in May, unchanged from April.
- Underutilization rate 34.8% vs 36.6% prior
- 22.5% live in a household reporting difficulty meeting immediate financial obligations, up slightly from April at 21.1%
- Overall share of employed Canadians who were concerned about job loss fell 5.6 percentage points to 10.8%
The rise in the participation rate combined with better-than-expected unemployment is a great sign, at least at first bullish. The rise in jobs likely reflects the government’s wage subsidy program. It allowed companies to re-hire workers with a massive wage subsidy. If you dig into the numbers, it’s all good news. In particular, the biggest jump in employment came in Quebec, which reopened in May.
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