The 419,000 rise in employment in July means that 55% of the three million pandemic-related job losses have now been reversed. We expect further gains in August and September to pull the unemployment rate below 10%, but the pace of labour market improvement is likely to slow markedly beyond then.
Another reassuring gain but long road ahead
- The 419,000 rise in employment in July means that 55% of the three million pandemic-related job losses have now been reversed. We expect further gains in August and September to pull the unemployment rate below 10%, but the pace of labour market improvement is likely to slow markedly beyond then.
- Although it reflected a sharp slowdown from the 953,000 gain in June, the increase in employment was a touch stronger than the consensus estimate, reflecting the further lifting of restrictions in the second half of June and first half of July. Accommodation & food services and wholesale & retail trade both saw gains of more than 100,000. Otherwise, the gains were broad based, with educational services, health care & social assistance, manufacturing, and construction all adding between 20,000 and 40,000 jobs.
- A large majority of the new jobs – 345,000 – were part-time. Part-time jobs were disproportionality affected by the lockdowns, falling by 30% from February to April compared to the 12% drop in full-time positions. The relative performance has now reversed, as July’s large gain means part-time employment was 5% below the pre-virus level, while full-time employment was 7.5% lower. (See Chart 1.)
- The employment gains by province were essentially proportional to their populations, with increases of 150,000 and 100,000 in Ontario and Quebec and gains of close to 70,000 in Alberta and British Columbia. Employment in Quebec and British Columbia was still 6% below the pre-virus level, while in Alberta it was 7% lower and in Ontario it was 8% lower. In the case of Ontario, that mainly reflects the later lifting of restrictions, whereas in Alberta it reflects the longer-lasting hit to the energy sector.
- Across Canada, the number of unemployed fell by a smaller 269,000 in July, as many of those that previously lost jobs started looking for work again. That was still enough to pull the unemployment rate down to 10.9%, from 12.3%. Given the additional lifting of restrictions in Ontario in late July, we expect a further rise in employment of around 500,000 in total across August and September. That should pull the unemployment rate back below 10% by September, but we suspect that progress beyond then will be much slower, with the unemployment rate remaining above 6% until at least 2023.
Chart 1: Employment Indices (February 2020 = 100)
Table 1: Labour Force Survey Data
Employment (Chg 000s)
Class of Worker (Chg 000s)
Stephen Brown, Senior Canada Economist, email@example.com