Canada Loses Record 2 Million Jobs; Temporary Layoffs Hide Extent Of Damage
Canada lost a record-breaking 2.0 million jobs in April while the unemployment rate surged to a near-record high 13.0%, according to official data released on Friday that did not reflect the full extent of layoffs caused by coronavirus shutdowns.
Although the numbers were not as bad as markets had feared, Statistics Canada said they did not capture the 1.1 million people who had temporarily lost their jobs and who expected to return to work once restrictions were relaxed.
Had these people been counted as jobless, the April unemployment rate would have been a record 17.8%.
Analysts in a Reuters poll had forecast a loss of 4 million jobs and an unemployment rate of 18%, up from the 7.8% seen in March, when 1 million jobs were lost.
“The unemployment rate at 13% is not something to be excited about, but it’s a lot better than feared. I would say that the jobs figures probably understate the weakness in the economy,” said Andrew Kelvin, chief Canada strategist at TD Securities
The Canadian dollar strengthened to a one-week high of C$1.3922 to the U.S. dollar, or 71.83 U.S. cents.
Most non-essential businesses have been shut since mid-March as officials urge people to stay at home to slow the spread of the novel coronavirus, but in recent weeks, some of the 10 Canadian provinces have started to gradually reopen their economies.
As of May 5, more than 7.5 million Canadians had applied for some form of federal employment aid, according to government data.
“Almost all (97.0%) of the newly-unemployed were on temporary layoff … indicating that they expected to return to their former employer as the shutdown is relaxed,” Statscan said in a commentary. The labor participation rate slid to 59.8% from 63.5% in March.
The record for the highest unemployment rate since Statscan adopted their current labor force model in January 1976 was the 13.1% seen in December 1982.
Some 1.47 million full-time jobs were lost along with 522,00 part-time positions.
“It is still obviously bad. You have 2 million people out of work (and) it’s also they worked for a lot less hours than they normally would,” said Nathan Janzen, senior economist at the Royal Bank of Canada.
“This is still consistent with a really, really sharp drop in output or another big decline in overall economic activity in April,” he said by phone.