Canadian employment rose by 953k in June, a second month of improvement. This was a fair bit stronger than the consensus expectation of 700k, and, together with May’s showing, means that roughly 40% of the jobs lost in March and April have been recovered. The labour force also recovered markedly, up 786k net persons, leaving the headline unemployment rate at 12.3% (down from 13.7% in May).
Hours worked also continued to improve, up 9.8% in June, again outpacing employment growth. Aggregate hours stood about 16% below their February level last month.
Statistics Canada continued to report labour market “underutilization”: about 27% of the potential labour force remained underutilized last month, meaning unemployed, not in the labour force but wanting a job, or working less than half of normal hours. This marked a further improvement from May’s 34% rate, but is nevertheless well above historic norms.
June’s net improvement was again led by the private sector (+867.3k), but the public sector also contributed (+74.5k), breaking a four month streak of net losses. Service sectors led the gains (+794.4k in aggregate), with notable gains in trade (+222.1k), accommodation and food services (+163.7k), and healthcare and social assistance (+151.1k). Goods producers added 158.6k net positions, as employment in both construction and manufacturing rose by about 80k.
Ontario played catch-up, adding 378k net positions, reflecting its somewhat later initial re-opening that missed the May survey window – indeed, Statistics Canada noted that Toronto’s easing of restrictions was delayed until late-June, meaning that impact was not captured in today’s report. Quebec has another solid month, adding nearly 250k net positions, enough to bring the level of employment above 90% of its February level. B.C. added a net 118k, and all remaining provinces also reported gains. Statistics Canada highlighted New Brunswick, which added 22k net positions in June, bringing the level of employment to about 97% of its pre-pandemic level – the strongest provincial recovery so far.
June brought a 167k drop in the level of unemployment, and the composition has changed in line with re-openings and a return of job searchers. Temporary layoffs now account for about a quarter of unemployment, down from half two months ago, while those who were previously not in the labour force more than doubled to roughly 40% of the total.
Another step in the right direction. There remains a long road ahead to regain the roughly 3 million jobs lost as a result of the pandemic, but the pace so far has defied expectations. It was not just the employment gains that were encouraging, but also the strong rise in the labour force. This may be telling us that Canadians are becoming a bit more confident from a health perspective – recall that at the height of the pandemic, there was a massive increase in people who had stopped looking for work entirely. The generally improving new infection numbers provide hope that the labour market healing can continue.
The pace of future gains remains an open question. There is the risk that what we’ve seen so far has been the “low hanging fruit” as operations that are able to safely re-open have done so. The pattern of gains will likely vary in the coming months as well. International travel restrictions are likely to remain in place for some time, with implications for those that tend to serve domestic versus international tourists, for instance.
Ultimately, while today’s numbers are encouraging, there are almost 1.8 million lost jobs yet to be recovered. It is still a long way to the finish line.