Canada added 290,000 jobs in May

After losing more than three million jobs in March and April, Canada’s economy added 290,000 jobs in May, Statistics Canada reported Friday.

The data agency reported that 290,000 more people had paid employment in May than in April. The surge means May was the best one-month gain for jobs in Canada in 45 years, although it happened from an admittedly low bar. It also  means the economy has now replaced about 10 per cent of the jobs it lost to COVID-19.

Despite the job gains, Canada’s official unemployment rate rose to 13.7 per cent, as 491,000 more people were looking for work in the job market, notably students, whose search for summer work isn’t normally recorded in the months before May.

In February, Canada’s jobless rate was 5.6 per cent. It increased to 7.8 per cent in March and 13 per cent in April. The number of unemployed Canadians has more than doubled since February.

The vast majority of the new jobs came in Quebec, which added 230,900. Every other province added jobs except Ontario, which lost 64,500 positions.

Blows away negative expectations

The job gains came as a pleasant surprise to economists, most of whom were expecting more job losses for the month.

The average expectation from economists polled by Bloomberg was for an additional loss of about 500,000. But not all of them thought the number would plunge again.

Economist Benoit Durocher at Desjardins was one of just two to forecast the adding of jobs — 400,000 to be precise.

That was his call before the numbers came out, and his optimism proved prescient, even if his estimate was off.

His reasoning was simple: as many Canadian provinces cautiously reopened in May, some of those people who were laid off temporarily in March and April would trickle back to work and show up in May’s employment numbers.

“Employment should rebound and return to positive territory in May, but the extent of the rebound remains unclear,” Durocher said ahead of the numbers coming out. “The return to pre-COVID-19 levels could be fairly slow.”

Others joined in the optimistic tone.

“The big picture is that activity did indeed bottom in April, and May’s survey was just late enough to capture the early stages of the economic reopening,” Bank of Montreal’s Doug Porter said. “Still, we are just beginning to dig out of a massively deep hole, and this will take an extended period of time before the rest of the three million job losses can be recouped.”

What do we mean by ‘job,’ anyway?

Scotiabank economist Derek Holt said that while overall the job numbers were certainly positive, he’s taking them with several grains of salt because it all depends on what is meant by “employment” in these unprecedented times.

StatsCan’s job numbers are based on a survey of Canadians, which means they are based on answers by human beings and subject to interpretation. Nearly three million Canadians reported they worked no hours in May, but still told the data collectors at StatsCan that they consider themselves to be employed.

“Whether or not you believe that Canada created about 290,000 jobs last month depends, critically, upon what fraction of those who worked no hours in May but said they were employed will ultimately return to their jobs,” Holt said.

Right now, the millions of people on Canada’s federal government wage subsidy program are not considered to be unemployed, despite not actively working, “and hence not as a lost job,” Holt noted. “Some will indeed return to full or part hours, and we all hope this to be the case for all, [but] some won’t regain the full hours they had before … and some will not return at all.”

If those people don’t return to active work, May’s job surge could vanish as swiftly as it appeared.

“I’m pretty comfortable with assuming that a sizeable fraction of such workers may well not return, such that taking at face value that Canada created 290,000 jobs makes me uncomfortable,” he said.

Not all good news

Even if one takes the optimistic view, the report had a few negative numbers beneath the headline.

Porter noted that at 13.7 per cent, Canada’s jobless rate is at its highest point since the Second World War. And “that leaves Canada with the dubious distinction of having the highest unemployment rate among all major economies,” he said.

The numbers also showed that two-thirds of the new jobs went to men, while women are still bearing the brunt of the impact from COVID-19. That’s partly because men are overrepresented in industries like manufacturing and construction, which are recovering faster than other parts of the economy.

“This is consistent with the more rapid increase in goods-producing industries, which account for a greater proportion of male employment (30.9 per cent) than female employment (9.9 per cent),” the data agency said.

Some 62,000 working age men with at least one preschool-aged child got a job in May. Only 21,000 jobless women with at least one such child did.

“As more COVID-19 restrictions are eased in the coming months, labour market outcomes of men and women with children will continue to be monitored,” StatsCan said.

Employment Minister Carla Qualtrough said the numbers show “the disproportionate impact that this pandemic has had on women, whether it be increased child care responsibilities, precarious work to begin with or undervalued work to begin with.”

“We absolutely know as a government that a successful recovery from this will necessarily involve a deliberate focus on supporting women,” she said.

Conservative MP Dan Albas, the employment critic for the Official Opposition, noted that “Canadian youth and students are getting hit hard by this pandemic,” and said the numbers underscore the “need to make sure that government programs help Canadians who are looking to return to work.”

Hassan Yussuff, president of the Canadian Labour Congress, said the numbers showed Canada’s job market is nowhere near out of the woods yet.

“This crisis is far from over,” he said. “Today’s data also reveals that women, low-paid workers, and racialized workers continue to struggle disproportionately.

“Today’s numbers also underscore the desperate need for accelerated action on child care to strengthen the job and economic recovery for women.”


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