Canada Adds Almost 1 Million Jobs, But Earns Only Muted Cheer
(Bloomberg) -- Canada reclaimed almost 1 million jobs of those lost to the coronavirus pandemic, a promising start to what’s expected to be an arduous recovery.
Employment rose by 952,900 in June as lockdown restrictions began to ease, Statistics Canada reported on Friday, adding to the 290,000 jobs created in May. The two-month total represents just over 40% of the 3 million lost in March and April, when mandatory business closures were imposed.
June’s better-than-expected reading will ease concern about how long-lasting the damage from the pandemic will be. But economists warn it could still take years before things return to normal. The Bank of Canada will give new estimates for the outlook when it releases its quarterly Monetary Policy Report on Wednesday.
“While today’s numbers are encouraging, there are almost 1.8 million lost jobs yet to be recovered,” Brian DePratto, senior economist at Toronto-Dominion Bank, wrote in a note. “It is still a long way to the finish line.”
Services-related sectors were responsible for 794,400 of the increase in June, led by retailers and food businesses. The natural resources sector led losses, with about 5,500 new positions eliminated. Gains were about evenly split between full time and part time, with 488,100 and 464,800 added jobs, respectively.
The numbers also reflect gradual reopenings in Ontario and Quebec. Canada’s two most-populous provinces made up two thirds of the June job gains. Ontario, the only province not to post an increase in May, saw an increase of 378,000 positions.
“An unambiguously strong print, with good breadth across sectors and regions,” Brett House, deputy chief economist at Bank of Nova Scotia in Toronto, said by email. “Almost all of the gains were in payroll jobs and in the private sector, so the quality of the numbers is high.”
Canada’s currency was little changed on the report, trading at C$1.3589 against its U.S. counterpart at 11:09 a.m. Toronto time. Two-year government bond yields were also little changed.
As impressive as the the employment jump is, the Canadian economy is still digging itself out of a deep hole. While the unemployment rate fell to 12.3% in June, that’s still near historically elevated levels. The 13.7% jobless rate in May was the highest since the Great Depression.
Hours worked rose 9.8% in June, but were still 16% below February levels.
What Bloomberg’s Economists Say
“Canada reported another month of stronger-than-expected job gains in June, underscoring the potential for a quick return to work as the nation shows relative success in taming Covid-19.”
--Andrew Husby, Bloomberg Economics
Terminal subscribers can read the full report here
The number of Canadians still employed but whose hours have been significantly cut fell by 823,000 in June. That brings the number of Canadians who either lost their job or worked substantially fewer hours to 3.1 million in June, from about 5.5 million in April.
“While we expect further ground to be recovered in the months ahead, the speed is likely to slow and it could turn out to be a bumpy ride along the way,” Royce Mendes, an economist at CIBC World Markets, said in a report to investors.
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