May 07, 2021 | 09:16
Canadian Jobs: April Showers ...
Canadian employment fell 207,000 in April, broadly in line with consensus amid the latest round of restrictions, and mostly reversing the big 303,000 gain the prior month. Unlike the setback we saw in the second-wave lockdowns in January, the job losses were not entirely focused in part-time, service-sector positions—full-time posted its first setback in a year (down 129k). And, while hospitality and retail & wholesale trade saw the biggest losses, some other key sectors also drooped last month. Overall, total hours worked fell by a heavy 2.7% in April, and are headed for roughly a 4% annualized drop for all of Q2, which fits with our call of flat GDP for the quarter. And, the unemployment rate backed up 6 ticks to 8.1%, almost precisely reversing the big March decline.
By industry: No surprise that the biggest declines were in the high-contact service sectors, with retail & wholesale trade down 89k and restaurants & hotels down 59k. While both heavy drops, both were lighter declines than seen in the second wave. Instead, other sectors also felt the bite this time, with education down 36k and construction off 13k (after a weather-aided bump the prior month). However, it is noteworthy that a variety of less-affected sectors did manage to keep grinding out gains, including resources, financial services, government and even a small rise in manufacturing.
By region: Again, no surprise here, as Ontario accounted for the bulk of the drop with a large 152,700 decline (almost identical to the January drop). However, new restrictions were felt in all four of the biggest provinces, with B.C. also hit with a large 43,100 job loss, while Quebec (-13,200) and Alberta (-12,600) were less affected. Half of the smaller six provinces managed to eke out gains.
Bottom Line: The third wave restrictions cut heavily into Canadian employment in April, mostly in line with expectations. However, in contrast to the mild impact on growth from second-wave restrictions, the latest drop may leave more of a mark on the broader economy, with full-time positions also hit this time. On a less downbeat note, the employment-to-population rate remains a full point above January's level (at 59.6%), and the participation rate is also higher than in the second wave at 64.9% (albeit down a bit from the pre-pandemic trend of 65.5%). Looking ahead, the quick snap-back in February and March from the second wave suggest that this latest drop can also be relatively quickly reversed when (if?) things are able to re-open.