The Conference Board of Canada’s Senior Economist, Cory Renner, offers the following insights on the October Labour Force Survey (LFS):
In another sign of the resilience of Canada’s recovery, employment rose by 83,600 in October. With shutdowns enacted in some provinces and cases rising in nearly all, this month’s reading should be embraced with some enthusiasm. However, the enthusiasm should be tempered as employment could weaken in November because COVID-19 cases remain high in many provinces. We expect the labour market will recover slowly through to next summer, after that we should see an acceleration in job growth assuming a vaccine is available and widely distributed.
- Employment rose by 83,600 in October, an impressive result given that regional shutdowns in Ontario and Quebec made this month’s job growth uncertain.
- Canada has now recovered nearly 2.4 million of the 3.0 million jobs lost during the pandemic, though recent months have seen the recovery’s momentum slow.
- While the slowdown in job growth the last few months has been concerning, October’s modest increase in employment should be celebrated given the sharp rise in COVID-19 cases in many parts of the country.
- That said, employment may well decline in November, as sustained high COVID-19 case counts begin to take a bite out of the labour market. Moreover, our consumer confidence survey shows that households are concerned about future income and employment prospects—suggesting that households may ease up on spending in coming months.
- The unemployment rate barely moved, dropping from 9.0 per cent in September to 8.9 per cent in October. The impact on the unemployment rate was mitigated by a rise in the labour force, indicating more Canadians are looking to get back to work.
- The shutdown led to employment declines in some provinces, such as Quebec (–12,900). Meanwhile, higher case counts weighed on employment in Saskatchewan (–1,600) and Manitoba (–1,800).
- Surprisingly, the higher case counts in Ontario (+30,600), Alberta (+23,400) and British Columbia (+33,500) didn’t weigh on top-line employment.
- Employment in the Maritime provinces continued to do well, with all four provinces experiencing employment growth in October.
- The path to recovery remains different among provinces but the recoveries are starting to converge. Employment in Newfoundland and Labrador is at 99.5 per cent of February levels, the highest of any province. Alberta has seen the slowest recovery, with employment 95.6 per cent of February levels.
- Shutdowns did affect some industries, particularly accommodations and food services, and information and culture. Employment in both industries declined this month, an unfortunate event given these industries were also the most affected by the pandemic.
- For industries that require social gathering, a full recovery will not occur until the health risks associated with COVID-19 are behind us.
- Professional services (+41,800) and finance services (+15,000) both saw strong employment gains this month. These industries have continued to perform well, with employment in both above pre-pandemic levels.
- Other industries that performed well are wholesale and retail trade (+45,300), health care and social assistance (+17,500).