E Canada’s Economic Recovery From The Pandemic Recession Will Be Painful, Just As In The US

In broad strokes, because of the pandemic recession, the Canadian economy lost 3 million jobs between February and April and regained nearly one million jobs in June. In many respects, the cyclical jobs recovery was like the American experience.

Canadian employment increased by 290,000 in May and by 953,999 in June (+5.8%), which still left the level of Canadian employment 9.2% lower than it was in February.

As in the US, Canada’s June monthly job gains look spectacularly high but considering the overall picture the losses are still huge due to the pandemic recession.

The gradual easing of the lockdown restrictions in Canada and the re-opening of the economy is projected to continue, particularly since unlike the US, Canada has been managing the pandemic with somewhat more success.

Canada’s June employment recovery was across most industrial sectors of the economy and in most of the provinces.

Not surprisingly as the data illustrate, the industry where employment remains furthest from its February peaks is accommodation and food services.

The recorded Canadian unemployment rate in Canada rose to 13% in April and 13.7% in May, but with the June employment recovery slipped down to 12.3%.

The June unemployment rate drop was the largest monthly decline on record, though the 12.3% figure was much higher than February’s 5.6%.

The pandemic related job losses were initially far higher for women than for men, and the June unemployment rate for women was 12.7% compared to 12.1% for men.

Virtually all Canadian provinces experienced more or less the same job losses and partial recoveries in May and June.

As of June, employment reached 89.7% of pre-pandemic levels in Ontario and Alberta, though New Brunswick climbed back to 97.1% of its former employment level.

In closing, as in the US, Canada’s unemployment rate does not fully capture the extent of the economic damage due to the pandemic.

According to Statistics Canada, “[i]f those who wanted to work but did not look for a job were included as unemployed in June, it would result in an adjusted unemployment rate of 16.3.”

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