Forecasts for Scale of Canadian Job Carnage Are All Over the Map

(Bloomberg) -- Economists agree Canada’s labor market suffered major damage in March, but the range of forecasts varies wildly.

Royal Bank of Canada sees 1 million lost jobs last month and Citigroup Inc. predicts 1.1 million after the coronavirus forced companies nationwide to cut staff. At the other end of the spectrum, 4CAST projects a net loss of 100,000, and JPMorgan Chase & Co. puts it at 175,000.

Such disparity may reflect just how quickly the virus has overwhelmed Canada’s economy. Prime Minister Justin Trudeau’s government has rolled out massive fiscal support to encourage employers to keep workers on payrolls, but it’s unclear how effective those programs will be.

Prior to the pandemic, the biggest decline in Canadian employment was 125,000 in January 2009. Jobs data for March will be released on April 9.

Forecasts for Scale of Canadian Job Carnage Are All Over the Map

Canada is by no means alone. Workers all over the world are reeling from the initial shock of the coronavirus recession, which may turn out to be the deepest in peacetime since the 1930s.

But an oil-price collapse is compounding the pain in Canada. Last month’s potentially epic jobs loss was foreshadowed by the record number of claims for employment insurance. The government received more than 2 million applications in the second half of March.

Those who lost their jobs due to Covid-19 can begin applying for emergency benefits on Monday, and they’ll receive the payment within five days by direct deposit or within 10 days by mail, Trudeau said Sunday at a news conference in Ottawa.

Statistics Canada conducted its labor force survey between March 15 and March 21, meaning the results should capture the early days of the disruption.

The median forecast in the Bloomberg survey of 19 economists is for a drop of 500,000 jobs. If that plays out, it will be the biggest decrease in records back to 1976.

FirmForecast Change in Employment
Action Economics-500K
Bank of America-200K
Bank of Montreal-600K
Bloomberg Economics-580K
Capital Economics-500K
Citigroup Inc.-1,100K
Credit Union Central Alberta-175K
National Bank Financial-350K
Royal Bank of Canada-1,000K
Toronto-Dominion Bank-350K
Standard deviation291K

©2020 Bloomberg L.P.

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