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Canada: Employment Continues to Improve in March

  • The Canadian labour market added 303k jobs in March, well above consensus estimates that called for a 100k gain. Last month’s improvement left employment 1.5% below the February 2020 level. The majority of the gains in March were in full-time work (+175k), but part-time growth was also impressive (+128k).
  • Like employment, Canada’s labour force also grew in March, increasing by 155k. Given the larger rise in employment, the unemployment rate declined to 7.5% from 8.2% in February.
  • The services sector drove the gains in the month, adding 260k jobs. In particular, the retail sector fully recovered January losses with employment increasing 95k in the month. Notably, the information, culture and recreation services industry added jobs (+62k) for the first time since September 2020. Health care and social assistance (+47k), educational services (+35k), and accommodation and food services (+21k) also saw strong gains in March. Meanwhile the goods sector added 43k jobs with construction (+26k) and manufacturing (+8k) leading the charge.
  • Provincially, employment increased in seven provinces. Ontario led the improvement with employment rising 182k in March. This was followed by Alberta (+37k), B.C.(+35k), and Quebec (+26k).
  • Total hours worked rose for the third straight month in March, increasing by 2.0%.

Key Implications

  • Helped by recent decisions to ease COVID-19 related restrictions, the Canadian labour market followed up a strong February with another extraordinary showing in March. While this brought employment even closer to its pre-pandemic level, the next couple of months could prove challenging for Canada’s labour market.
  • Indeed, the third wave of the pandemic is accelerating with caseloads nearing the heights witnessed during the second wave. Provinces are reacting by tightening restrictions that were eased only a couple of months ago. Once again, the struggling high-touch services sectors will bear the brunt of the impact. Retail, accommodation and food, and personal care services have been heavily targeted in renewed measures, implying a widening of the K-shaped employment recovery.
  • Unlike GDP, which has continued to improve despite changes in public health measures, employment is at its whims. As restrictions tighten, it’s very likely that the employment recovery will see a setback in April.
TD Bank Financial Grouphttp://www.td.com/economics/
The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.

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