The Conference Board of Canada’s Senior Economist, Cory Renner offers insights on June’s Labour Force Survey (LFS):
In another sign Canada’s economy is on the path to recovery, employment rose by a record 952,900 in June. The rebound was concentrated in services, part-time and low-wage jobs—a partial recovery in the same segments that were hardest hit by the pandemic. Despite the solid gains in June, Canada’s economy still has a long road back to recovery. Employment is still down 1.8 million when compared to pre-pandemic levels, with the largest gaps in industries that will not recover quickly.
- Employment rose by 952,900 in June, another sign that the worst of the pandemic’s economic toll is now behind us. When June’s employment increase is added to May’s increase of 289,600, just over 1.2 million of the 3 million jobs lost due to COVID-19 have now been recovered.
- The strong employment rebound this month is another indication that Canada’s recovery is well on its way. While it is good news that the country added nearly 1 million jobs this month, the path to recovering the 1.8 million net jobs lost from the pandemic will be long.
- Many industries that we expect to recovery slowly industries still have employment well below pre-pandemic levels. Accommodation and food services is the hardest hit, with employment still down 33 per cent. Information, cultural and recreation industries have also been slow to recover, with employment still down 17 per cent compared to pre-pandemic levels.
- The labour force rose by 786,300 in June, an indication Canadians are feeling more confident about returning to work.
- The unemployment rate fell to 12.3 per cent in June, a decline from 13.7 per cent in May
- The survey was conducted from June 14–20, meaning the data covers many re-openings across the country. The one major exception is Toronto and other smaller communities in Ontario, where restrictions were slower to ease.
- All provinces experienced an increase in employment this month. The largest provinces like Ontario (+377,900), Quebec (+247,500) and British Columbia (+118,100) experienced the largest job gains. In percentage terms, Nova Scotia and New Brunswick saw the largest increases.
- The pace of recovery has been significantly different across provinces. Nova Scotia recovered half of jobs lost, New Brunswick recovered 78 per cent of jobs lost and Quebec recovered 58 per cent. Meanwhile, Ontario (recovered 29 per cent) and Alberta (recovered 33 per cent) are experiencing a slower labour market recovery.
- Rebounding from much steeper job losses, the services sector (+794,000) led the employment increase in June. Employment in goods industries rose by 158,600.
- With many stores re-opening over the survey period, employment in wholesale and retail trade rose by 222,100, the most of any industry. Employment in accommodation and food services (+163,700) and health care and social services (+121,100) also saw significant gains.
- On the good side, the employment increase was led by construction (+83,200) and manufacturing (+81,300).
- With the labour market adding more part-time and low wage jobs, the year-over-year growth in the average weekly wage fell from a nearly 12 per cent gain in May to an 8 per cent gain in June. The decline is mostly due to the composition of occupations easing back to normal. Given that Canada’s economy lost many low-wage jobs in the pandemic, average wages (economy wide) rose during the crisis and will be falling during the recovery.