The Canadian economy lost 63,000 jobs last month, and the job market contracted for the first time since the start of COVID-19, after dark days in March and April.
Statistics Canada The unemployment rate on Friday was 8.6 percent, slightly higher than the previous month. It was 5.6 per cent last February, up from 13.7 per cent in May, before COVID-19.
As large provinces such as Ontario and Quebec went into severe locks this month, economists had expected the monthly numbers to be approximate. But that figure was almost twice as bad as the 39,000 job drop expected by the consensus of economists voted by Bloomberg.
This is the first fall since April, and is a sign that the economic recovery may be steaming away before the job market even returns to where it was before the epidemic began.
As of December, Canada had 636,000 fewer jobs than in February. It employs an additional 448,000 people, but with the current epidemic they are far less than they normally are.
Bank of Montreal economist Doug Porter noted that 2020 is now officially the worst year for Canadian jobs since 1982.
On the net, all of the jobs lost in December were in the service sector, with the food and accommodation sector standing alone with 56,700 lost jobs, as many restaurants closed.
“As regulation expands and extends from the December survey, we may see another setback in next month’s report,” Porter said. “But the good news is that Strike 2 imposes far less severe economic costs than spring, especially in sectors that are not directly affected.”
Brendan Bernard, an economist with a job search website, said that although the numbers were actually dark, they were not a bad situation.
“If there was a silver lining, things could have been worse,” he said. “The fall of December was nowhere near the level of the decline we saw last spring.
“Nevertheless, it is becoming clear again that the job market cannot recover amid raging epidemics.”
The participation rate is declining
Leah Nord’s participation rate with the Canadian Chamber of Commerce in particular – the number of working-age people looking for a job or a job – was down 0.2 percentage points to 64.9 percent.
The fall “mostly involves male youth and working women, who may be frustrated with the job search and may suddenly stay home to take care of children who go home,” he said.
If that trend continues, it’s a bad omen for the job market from here, North said.
“As we look forward to it, we believe there is a risk of losing many of the returns of the last seven months, which indicates the possibility of a return to a dark period in Canada’s labor market in the coming months.”
Canada’s numbers for December are widely aligned with the United States, where the number of jobs was twice as bad as expected, with 140,000 jobs lost.