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Employment Rebounds: Another Sign the Economic Recovery has Begun

Ottawa, June 5th, 2020— The Conference Board of Canada’s Senior Economist, Cory Renner offers insights on May’s Labour Force Survey (LFS):

“In another sign that the worst of the economic decline from COVID-19 is behind us, employment rose by 289,600 in May. Given the survey dates didn’t coincide with much of Ontario’s gradual re-opening, employment growth will continue in June as restrictions are gradually eased across the country. Of course, even with the increase this month, employment remains well below where it was in February, and the road to recover the net 2.7 million jobs lost will be long.”

Insights

  • Employment rose by 289,600 in May, a sign that the worst of the labour market impacts from COVID-19’s are now behind us. With that said, Canada’s labour market remains a shell of its former self – employment is still 2.7 million less than it was in February.
  • It’s re-assuring to see job growth this month, which lines up with other positive data, such as the uptick we saw in consumer confidence last month. Given re-openings across the country continue to gain steam, job growth should accelerate in June.
  • The labour force also rose this month, meaning more Canadians are looking for work, a sign that confidence in job prospects is improving. Overall, the labour force was up by 490,500 (higher than employment).
  • Because the labour force grew by more than employment, the unemployment rate ticked up to 13.7 per cent. In the context of such volatility in employment and workers opting in and out of the labour force, changes in the unemployment rate should be interpreted with caution.
  • Full-time employment (+219,400) rose by more than part-time (+70,300). This is likely a result of industries that typically employ part-time workers (such as accommodation and food services) still being closed.
  • The survey dates were from May 10th to May 16th, meaning re-openings in the second half of May are not accounted for in this month’s data.
  • Quebec accounted for nearly all the employment growth (+230,900). Although it’s worth noting that Quebec had seen the highest rate of job losses in March and April. The province’s employment increase in May was heavily supported by construction and wholesale and retail trade.
  • Ontario was the only province to see employment fall this month (-64,500). Given most restrictions remained in place during the survey period, Ontario will likely see strong employment growth in June’s survey.
  • All other province saw solid job gains, with British Columbia (+43,300) and Alberta (+28,200) experiencing the largest increase outside Quebec. In percentage terms, growth was especially strong in Newfoundland and Labrador (+5.3 per cent) and New Brunswick (+5.4 per cent).
  • Employment growth was strong in manufacturing (+79,100) and construction (+73,700), industries that were either re-opened quickly or were closed voluntarily.
  • Wholesale and retail trade (+107,000) and accommodation and food services (+41,900) also saw strong growth, which is a positive development given these industries were among the hardest hit in the wave of job losses
  • Because of a slight rebound in lower wage jobs, growth in the average weekly wage rate fell from 12.3 per cent in April to 11.9 per cent in May. The high rate of wage growth continues to be a result of the labour market retaining more higher paying jobs.

 

 

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