Labour Market Trends

Labour Market Trends

August 2020

Canadian Job Market Continues to Make Gains, But Pace of Recovery is Moderating

HIGHLIGHTS

  • Employment rose by 245,800 (+1.4 per cent) in August, all in full-time work.
  • Over the past four months, the Canadian economy has recovered 1.9 million or 63.5 per cent of the 3 million jobs lost over March and April.
  • Hours worked have also increased for four straight months, climbing an additional 2.9 per cent in August. They have recovered 69 per cent of their coronavirus-related losses.
  • While the unemployment rate declined for the third straight month, it remains in the double digits, falling from 10.9 per cent in July to 10.2 per cent in August.
  • All provinces except New Brunswick saw employment rise last month. Nearly 80 per cent of the net new jobs created were in two provinces: Ontario and Quebec.
  • Employment in the manufacturing sector rose for the fourth consecutive month in August, up by 29,400. The sector has recovered close to three-quarters of its pandemic-related job losses.
  • Canada’s job market continues to heal. In the past four months, it has recovered 1.9 million out of the 3 million jobs lost over March and April. However, with the pace of the recovery now slowing, fully recouping the remaining 1.1 million jobs will take much longer.

Sources: CME; Statistics Canada.

CANADIAN ECONOMY ADDS 245,800 JOBS IN AUGUST

Employment rose by 245,800 (+1.4 per cent) in August, all in full-time work. Over the past four months, the Canadian economy has recovered 1.9 million or 63.5 per cent of the 3 million jobs lost over March and April.

The manufacturing sector continues to recover at an even faster rate. Following cumulative jobs gains of 189,700 between May and July, employment in the sector rose by an additional 29,400 last month. Accordingly, the manufacturing workforce has recovered 219,100 or 72.6 per cent of the 301,600 jobs lost during March and April.

All in all, Canada’s job market continues to heal. In the past four months, it has recovered 1.9 million out of the 3 million jobs lost over March and April. But with the pace of the recovery now slowing, fully recouping the remaining 1.1 million jobs will take much longer.

HOURS WORKED CLIMB FOR FOURTH STRAIGHT MONTH

As has been the case throughout the recovery, hours worked climbed at a faster pace than employment. Hours worked were up 2.9 per cent in August, building on the cumulative 22.9 per cent increases seen between May and July. Accordingly, hours worked have recovered about 69 per cent of the March and April losses.

After increasing by a total of 29.4 per cent between May and July, hours worked in the manufacturing sector rose a further 1.9 per cent in August, and now have recouped over 77 per cent of the pandemic-related losses. This is yet further evidence that the manufacturing labour market is recovering more quickly than that of the all-industry average.

UNEMPLOYMENT RATE MOVES LOWER, BUT REMAINS IN THE DOUBLE DIGITS

While the unemployment rate declined for the third straight month, it remains in the double digits, falling from 10.9 per cent in July to 10.2 per cent in August. This is down from a peak of 13.7 per cent in May, but it remains a far cry from the February 2020 rate of 5.6 per cent. As noted by Statistics Canada, during the 2008-09 global financial crisis, it took the unemployment rate about nine years to return to its pre-recession rate.

The unemployment rate in manufacturing is falling at a much steeper rate. The sector’s jobless rate declined from 7.3 per cent in July to 6.0 per cent in August. In other words, after peaking at 13.6 per cent in April, the manufacturing unemployment rate has fallen 7.6 percentage points over the past four months and is now only 1.9 percentage points above the February 2020 rate of 4.1 per cent.

EMPLOYMENT CLIMBS IN ALL PROVINCES EXCEPT NEW BRUNSWICK

For the second straight month in August, employment rose in every province except New Brunswick. Nearly 80 per cent of the net new jobs created were in two provinces: Ontario and Quebec. Ontario added 141,800 workers to payrolls last month, bringing employment to within 93.6 per cent of its February level. During August, Toronto, the Peel Region, and Windsor-Essex moved into Stage 3 of the province’s reopening plan, joining the rest of Ontario.

Quebec employment climbed by 54,200, building on gains of 576,000 over the previous three months. This pushed employment up to 95.7 per cent of its pre-COVID-19 level. In more good news, August employment growth was entirely in full-time work.

Employment also rose in all western provinces, ranging from a gain of 15,300 in BC to an increase of 4,700 in Saskatchewan. Nova Scotia posted the biggest gain in Atlantic Canada, with employment up 7,200. On the other hand, employment in New Brunswick dipped 700 last month, the second consecutive drop. Nevertheless, despite these declines, the province remains the closest to fully recouping its COVID-19 job losses. Employment in August was 96.4 per cent of its February level.

Finally, manufacturing employment increased in 9 of 10 provinces in August, with the gains concentrated in Ontario (+12,500), Quebec (+7,300), and BC (+6,000). Advances elsewhere were more modest, ranging from 1,200 in Alberta to a mere 100 in PEI. Manitoba was the lone province to post a decline, with manufacturing employment shrinking by 700.