Quick Take

Thawing labour market pushes unemployment to 12-month low

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The Conference Board of Canada’s economist Liam Daly offers the following insights on February’s Labour Force Survey (LFS):

February’s Labour Force Survey brings news of some significant improvements among industries that have suffered greatly over the previous two months, notably retail trade. With the rollout of vaccines underway and a gradual easing of restrictions, this morning’s release marks the restart of the labour market after a difficult couple of months.

  • After falling for two consecutive months, February’s Labour Force Survey brings welcome news as employment grew by almost 260,000. An additional 88,200 people entered full-time employment while the number of part-time workers increased by 171,000.
  • Gains in employment pushed the unemployment rate down by over 1 per cent to 8.2 per cent, its lowest level since March of 2020.
  • A cursory glance across all sectors of the economy reveals that less stringent restrictions for the retail sector were a crucial factor driving jobs growth this month.
  • After shedding almost 168,000 jobs in January, the reopening of many retail outlets—notably in Quebec and Ontario where lockdown orders were particularly strict—allowed 122,300 jobs in the retail sector to be clawed back in February.
  • Beyond retail, there was notable employment growth in the educational services sector of 2.1 per cent, indicative of increased staffing to support the safe return of children to classrooms.
  • Thanks largely to the gains in the retail and education sector, Ontario (+100,300) and Quebec (+112,600) were able to post significant job gains.
  • Employment rose in all prairie provinces. The increase marks the third consecutive month of employment growth in Manitoba (+ 16,200), Saskatchewan (+2,300), and Alberta (16,800).
  • In British Columbia, which has managed to navigate through the second wave with much greater success than Quebec and Ontario, employment grew for the tenth consecutive month, as the province added 26,600 jobs in February.
  • In the Atlantic provinces, the picture was mixed. Nova Scotia was the only province to see a rise in employment in February, adding 2,500 jobs. Meanwhile, employment fell in Newfoundland and Labrador (15,000), Prince Edward Island (-500) and New Brunswick (2,600).
  • Employment in the two largest goods-producing industries, construction and manufacturing, grew by roughly half a per cent. These gains offset fewer jobs in the natural resources sector.
  • Other notable improvements were recorded in the service sector. In particular, the accommodation, food services, and personal care services industries recouped many jobs that were lost in the previous month. Many will be hoping that is the start of an upward trend for these industries, where employment remains well below pre-pandemic levels.
  • In the professional services sector—which eclipsed pre-pandemic employment back in October—employment increased by 0.7 per cent. In contrast, employment in the financial sector—which has been mostly insulated from the second wave—ticked down 0.5 per cent.
  • The health care and social assistance sector posted modest job growth of 0.1 per cent to reach a new high since the onset of the pandemic. Nevertheless, employment remains 0.6 per cent below its level of February last year.
  • This morning’s release supports our forecast that we will see the recovery in Canada’s labour market begin once lockdown measures are eased.
  • Looking ahead, we expect employment to continue to rise over the next few months and accelerate in the second half of 2021. However, our forecast is contingent on the widespread distribution of the effective COVID-19 vaccines by the third quarter of the year. While we believe that is the most likely scenario, risks surrounding the timing of the vaccine distribution and novel COVID-19 variants remain in play, which could delay Canada’s economic recovery.

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Liam Daly

Liam Daly


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