The Conference Board of Canada’s Senior Economist, Cory Renner offers insights on August’s Labour Force Survey (LFS):
Canada’s economic recovery continues, albeit at a slower pace. Employment rose by only 245,800 in August, the smallest increase since the recovery began in May. With restrictions largely lifted across the country, slower employment growth will be the norm through the recovery. While Canada has recovered 1.9 million of the 3.0 million jobs lost during the pandemic, the remaining 1.1. million yet to be recovered are likely facing more structural problems. This means many of those jobs may never come back, and the recovery should now look to creating jobs in other segments of the economy with a brighter future.
- Employment rose by 245,800 in August, led by 205,800 more full-time jobs. The increase in the number of jobs indicates Canada’s economic recovery continues, but the gain is the smallest of the four recovery months (May to August), suggesting a recovery to the pre-pandemic level of employment remains far off.
- Canada has now recovered 1.9 million of the 3.0 million jobs lost during the pandemic, or 63.5 per cent.
- While a slowdown in the labour market’s recovery was expected, it continues to be concerning. At this point, restrictions have been mostly lifted across Canada. That means many jobs lost due to restrictions have been recovered, and the current jobs lost are more structural in nature and will take longer to come back (if they ever do).
- There is concern about whether employment gains will continue in September. The survey dates were August 9th to August 15th, which means that the impact of rising cases in the later parts of August in several provinces will show up in September’s survey.
- The unemployment rate dropped to 10.2 per cent this month, as the labour force (+109,100) grew by much less than employment.
- By province, Ontario saw the largest increase in jobs (+141,800). Quebec (+54,200), British Columbia (+15,300) also saw large gains.
- In percentage terms, P.E.I. (+2.1 per cent), Ontario (+2 per cent) and Newfoundland and Labrador (+1.9 per cent) saw the largest increases.
- It’s not surprising to see Ontario with such a large recovery, given the province was among the most cautious in easing restrictions, especially in the Toronto area. As a result, this month captures more restrictions being lifted in Ontario than in other provinces (where they were eased earlier).
- For a second straight month, New Brunswick was the only province to see a decline in employment. While it’s a concern, and indicates the province’s labour market has lost steam, employment in the province is down 3.6 per cent from February levels, the smallest decline of every province. This suggests the province’s labour market is further along in its recovery.
- Comparing current employment levels to February’s pre-COVID-19 levels provides a relative comparison of the labour market recovery. After New Brunswick, the provinces that are further along in their recoveries are Manitoba where employment is down 4.1 per cent, Saskatchewan (down 4.3 per cent) and Quebec (down 4.3 per cent).
- Meanwhile, Alberta (down 7.0 per cent), Ontario (down 6.4 per cent) and British Columbia (down 5.9 per cent) are the furthest from full recovery.
- Services producing industries saw employment rise by 218,100, while employment in goods producing industries rose by 27,600.
- By industry, employment was strongest in education (+50,500) as schools across the country began plans to re-open. Accommodation and food services (+48,900) also rose, as confidence in going to restaurants continued to rise. Manufacturing (+29,400) also continued its steady rise.
- No industry has yet to recover fully to February levels.
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