Canada's job market: still hanging in

Well, that was a bit of a surprise -- and evidently, not just to me. The consensus analysts' opinion for Canadian employment in November was a gain of 20,000, but Statistics Canada reported this morning that the actual increase was 62,000, with the unemployment rate falling to 8.5 percent. That is the smallest increase since May, as the ever-negative CBC website has been quick to emphasize, but it is important to bear in mind that in any more normal year, a 62,000 gain in one month would be a stunningly large number.   

Most of the details of the report were positive, most notably the fact that 99,000 full-time jobs were added in the month. Employment rose in six Provinces (BC, Ontario and all four Atlantic provinces), was largely stable in three, and only fell significantly in Manitoba. Total hours worked continued to grow, rising by 1.2 percent in the month, and the labour force underutilization rate, which takes account of involuntary part-time work and discouraged unemployed workers as well as those actually counted as unemployed, continued to edge lower. 

Encouraging as these statistics are, the job market remains well below its pre-pandemic (i.e February) peak. Overall employment remains about 600,000 lower than in February, the unemployment rate is 2.9 percentage points higher, and the labour force underutiliization rate, at 16.9 percent in November, almost 6 percentage points higher.   

The news on the job market is likely to get worse over the winter months. The renewed COVID-related restrictions and lockdowns across the country were by and large only in effect for the latter part of the month of November, while StatsCan compiled its data in the week of November 8-14. December will represent the first month of strong restrictions for most of the country since April, and this will inevitably translate into job losses. The promise of a vaccine roll-out offers hope that a return to pre-pandemic conditions in the job market can eventually be achieved, but significant improvement is not likely until the second quarter of 2021 at the earliest.