The Conference Board of Canada’s Senior Economist, Cory Renner offers insights on April’s Labour Force Survey (LFS):
In the first wave of COVID-19 related job losses, Canada lost over one million jobs in March. This was the largest monthly employment decline ever and we expect even more job losses in April as the full impact of mandatory closures and physical distancing measures are reflected in the data. The initial job losses were concentrated in accommodations, food service, retail trade and cultural industries. April is likely to show a broader decline as more businesses scale back due to mandatory closures and reduced demand.
- In the first wave of COVID-19 job losses, Canada’s labour market shed 1 million jobs. This is by far the largest decline ever, far exceeding the 124,400 jobs lost in January 2009.
- To put the decline in perspective, during the 2008–09 financial crisis, Canada’s economy shed 426,500 jobs from November 2008 to June 2009, at the peak of the financial crises. In just one month, more than twice as many jobs have been lost.
- Even more troubling than the 1 million job losses last month is the expectation of what’s to come. Given the survey’s reference week was March 15 to March 21st, many job losses will in fact show up in April. We expect April’s job losses to be significantly higher than those of March.
- The job losses pushed the unemployment rate up to 7.8 per cent, the highest rate of unemployment since 2010. The unemployment rate would have been much higher if it weren’t for a record 597,000 people leaving the work force.
- All provinces saw significant job losses in March. Job losses were most severe in the largest provinces like Ontario (–402,800), Quebec (–264,000), British Columbia (–132,400) and Alberta (–117,100). In percentage terms, Quebec (–6.0 per cent) saw the largest decline, while P.E.I. (–2.6 per cent) saw the smallest decline.
- Unsurprisingly, job losses were focused in the accommodation, food services, culture and retail industries as these industries depend on physical proximity more than most others.
- Over 294,000 (24 per cent) jobs were lost in accommodations and food services, the largest of any industry. Given many non-essential services were forced to close following the survey’s release date, this number will rise significantly in April.
- Wholesale and retail trade saw 207,500 jobs lost in March. Like accommodation and food services, we expect job losses in this sector to rise significantly next month.
- Other industries which saw major job losses are education (–125,400), information, culture and recreation (–103,700) and health care (–100,000).
- It’s surprising that jobs in primary industries (such as fishing, forestry and energy) increased. Given the collapse in oil prices, we expect to see job losses in this sector next month.
- Job losses were mostly concentrated in smaller businesses. Nearly 490,000 jobs were lost by businesses with less than 20 employees (which make up 29 per cent of employment), while only 157,000 jobs were lost by companies with over 100 employees (which make up 37 per cent of employment).
- Because job losses were concentrated in lower wage industries, wage growth rose significantly. Year-over-year wage growth rose by 6.2 per cent in March, well above the 4.1 per cent year-over-year increase in February.